Audit 346874

Federal Program – Department of Education, Developing Hispanic-Serving Institutions Program, 84.031S Program Year – July 1, 2023 – June 30, 2024 Criteria or Specific Requirement – Cash Management – The Uniform Guidance and the grant award notification signed by the College for this grant, by reference to the Uniform Guidance, state that the College must minimize the time elapsing between the transfer of funds from the United States Treasury to the College and the utilization or expenditure of those funds. The Uniform Guidance applies to any and all types of federal awards (2 CFR Section 200.305(b)). Condition – The time between the College’s draw-down of funds from the United States Treasury and utilization of those funds was not minimized as stated in the general cash management section of Uniform Guidance. Questioned Costs – None Context – The College drew down $600,000 of the HSI grant during the year ended June 30, 2024, of which $165,484 was not needed immediately (or within a minimum amount of time) for program costs at June 30, 2024. The funds draw-down were used for allowable purposes but time was not minimized between draw-down and use for program purposes. Cause and Effect – The College did not process these funds in accordance with cash management rules under the Uniform Guidance, applicable to these funds with respect to minimizing the time elapsed between the date of the initial transfer and the expenditure or utilization of these grant funds. Identification as a Repeat Finding – No Recommendation – We recommend that the College review its policies and procedures regarding draw-down of non-SFA federal grants to ensure they are in compliance with the cash management rules of the Uniform Guidance. Specifically ensuring the College’s policy minimizes the time between the draw-down and the use of the funds for program purposes. Views of Responsible Officials and Planned Corrective Action – In the first year of the grant award, we retained a consulting group to ensure that our processing and management of the grant complied with all relevant requirements. This was the first time all personnel at the college had dealt with this particular government grant and so guidance was followed by the grant mandated consultants regarding grant drawdowns. The interpretation from our grant mandated consultants was that so long as we did not have excessive drawdowns as defined by the Hispanic Serving Institution Grants manual, we would be in compliance with CFR 200.305(b). Given that guidance, we believed we were in compliance when the decision was made to drawdown grant funds for work that contractors were projected to complete in July. Our grant mandated consultants noted that while we were negotiating the timeline of the work, it was "administratively feasible" to draw funds as the work was to be completed over the summer by the end of July. The schedule ended up getting pushed to the end of August, but funds were anticipated to be drawn within a month of drawdown and they were fully expended by August 31--and payments started going out July 5th to contractors. The combination of the delay in the completion of the contracting work and the wider interpretation of CFR 200.305(b) from our mandated consultants than our auditors are the reason for the non-compliance finding.

Federal Program – Department of Education, Developing Hispanic-Serving Institutions Program, 84.031S Program Year – July 1, 2023 – June 30, 2024 Criteria or Specific Requirement – Cash Management – The Uniform Guidance and the grant award notification signed by the College for this grant, by reference to the Uniform Guidance, state that the College must minimize the time elapsing between the transfer of funds from the United States Treasury to the College and the utilization or expenditure of those funds. The Uniform Guidance applies to any and all types of federal awards (2 CFR Section 200.305(b)). Condition – The time between the College’s draw-down of funds from the United States Treasury and utilization of those funds was not minimized as stated in the general cash management section of Uniform Guidance. Questioned Costs – None Context – The College drew down $600,000 of the HSI grant during the year ended June 30, 2024, of which $165,484 was not needed immediately (or within a minimum amount of time) for program costs at June 30, 2024. The funds draw-down were used for allowable purposes but time was not minimized between draw-down and use for program purposes. Cause and Effect – The College did not process these funds in accordance with cash management rules under the Uniform Guidance, applicable to these funds with respect to minimizing the time elapsed between the date of the initial transfer and the expenditure or utilization of these grant funds. Identification as a Repeat Finding – No Recommendation – We recommend that the College review its policies and procedures regarding draw-down of non-SFA federal grants to ensure they are in compliance with the cash management rules of the Uniform Guidance. Specifically ensuring the College’s policy minimizes the time between the draw-down and the use of the funds for program purposes. Views of Responsible Officials and Planned Corrective Action – In the first year of the grant award, we retained a consulting group to ensure that our processing and management of the grant complied with all relevant requirements. This was the first time all personnel at the college had dealt with this particular government grant and so guidance was followed by the grant mandated consultants regarding grant drawdowns. The interpretation from our grant mandated consultants was that so long as we did not have excessive drawdowns as defined by the Hispanic Serving Institution Grants manual, we would be in compliance with CFR 200.305(b). Given that guidance, we believed we were in compliance when the decision was made to drawdown grant funds for work that contractors were projected to complete in July. Our grant mandated consultants noted that while we were negotiating the timeline of the work, it was "administratively feasible" to draw funds as the work was to be completed over the summer by the end of July. The schedule ended up getting pushed to the end of August, but funds were anticipated to be drawn within a month of drawdown and they were fully expended by August 31--and payments started going out July 5th to contractors. The combination of the delay in the completion of the contracting work and the wider interpretation of CFR 200.305(b) from our mandated consultants than our auditors are the reason for the non-compliance finding.