Audit 40764

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Education - Assistance Listing Number 84.425E, COVID-19 - Higher Education Emergency Relief Fund (HEERF) - Student Aid Federal Award Identification Number and Year - P425E201734 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Based on the terms and conditions of the HEERF, grant institutions must receive affirmative written consent from students before using emergency financial aid grants to satisfy a student's outstanding account balance. This requirement is stipulated within the frequently asked questions document released by the granting agency, which is considered by the granting agency to be authoritative. Condition - The College did not obtain affirmative written consent from students before using emergency financial aid grants to satisfy a student's outstanding account balance in accordance with the terms and conditions of the award. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - Of the 29 students selected for HEERF student grants testing, the College did not obtain affirmative written consent for 5 students who had grant funds applied to their outstanding account balances. Based on these identifications, management undertook a further analysis, which determined that emergency grant funds in the amount of $2,707,692 were used to satisfy a student's outstanding account balance for which affirmative written consent was not obtained. As discussed in further detail below, all grant funds related to the noncompliance were returned to the granting agency subsequent to year end. As a result, there are no expenditures reported on the schedule of expenditures of federal awards related to these emergency grant funds. Cause and Effect - There was no control process present to ensure that compliance with the requirements of the grant was met, specifically as it relates to allowable costs. As a result, unallowable costs were incurred under the grant, resulting in a noncompliance with laws and regulations. Following the identification of the noncompliance, subsequent to year end, the College informed the granting agency (the Department of Education) of the noncompliance, and the granting agency required the College to return the emergency student grant funds. Recommendation - The College should design and implement procedures to ensure that all grant compliance requirements are reviewed and adhered to. Views of Responsible Officials and Planned Corrective Actions - The grant funding applied incorrectly as a result of this finding has been returned to the Department of Education. The amount of the grant funding returned was $2,707,692. In response to this finding, the College?s current financial aid director, chief counsel, chief student enrollment officer, and chief financial officer developed remedial action to implement an appropriate application process to obtain affirmative consent from all students on future application of grant moneys to outstanding tuition balances. This new process was implemented as of August 17, 2022 and going forward. To ensure compliance, the student grant application now includes functionality that requires positive affirmative consent from all applying students before grant moneys are applied to an outstanding tuition balance. Now that the updated application is live on the College?s scholarship website, the College is currently accepting applications for the remainder of the award and only applying the funds to student accounts with the student?s affirmative consent. If students select either the tuition and fees or prior balances selections, funds will be applied to their outstanding tuition balances accordingly. If students do not affirmatively select either of these options, the funds will be distributed directly to the student as an emergency grant.

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Education - Assistance Listing Number 84.425E, COVID-19 - Higher Education Emergency Relief Fund (HEERF) - Student Aid Federal Award Identification Number and Year - P425E201734 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Based on the terms and conditions of the HEERF, grant institutions must receive affirmative written consent from students before using emergency financial aid grants to satisfy a student's outstanding account balance. This requirement is stipulated within the frequently asked questions document released by the granting agency, which is considered by the granting agency to be authoritative. Condition - The College did not obtain affirmative written consent from students before using emergency financial aid grants to satisfy a student's outstanding account balance in accordance with the terms and conditions of the award. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - Of the 29 students selected for HEERF student grants testing, the College did not obtain affirmative written consent for 5 students who had grant funds applied to their outstanding account balances. Based on these identifications, management undertook a further analysis, which determined that emergency grant funds in the amount of $2,707,692 were used to satisfy a student's outstanding account balance for which affirmative written consent was not obtained. As discussed in further detail below, all grant funds related to the noncompliance were returned to the granting agency subsequent to year end. As a result, there are no expenditures reported on the schedule of expenditures of federal awards related to these emergency grant funds. Cause and Effect - There was no control process present to ensure that compliance with the requirements of the grant was met, specifically as it relates to allowable costs. As a result, unallowable costs were incurred under the grant, resulting in a noncompliance with laws and regulations. Following the identification of the noncompliance, subsequent to year end, the College informed the granting agency (the Department of Education) of the noncompliance, and the granting agency required the College to return the emergency student grant funds. Recommendation - The College should design and implement procedures to ensure that all grant compliance requirements are reviewed and adhered to. Views of Responsible Officials and Planned Corrective Actions - The grant funding applied incorrectly as a result of this finding has been returned to the Department of Education. The amount of the grant funding returned was $2,707,692. In response to this finding, the College?s current financial aid director, chief counsel, chief student enrollment officer, and chief financial officer developed remedial action to implement an appropriate application process to obtain affirmative consent from all students on future application of grant moneys to outstanding tuition balances. This new process was implemented as of August 17, 2022 and going forward. To ensure compliance, the student grant application now includes functionality that requires positive affirmative consent from all applying students before grant moneys are applied to an outstanding tuition balance. Now that the updated application is live on the College?s scholarship website, the College is currently accepting applications for the remainder of the award and only applying the funds to student accounts with the student?s affirmative consent. If students select either the tuition and fees or prior balances selections, funds will be applied to their outstanding tuition balances accordingly. If students do not affirmatively select either of these options, the funds will be distributed directly to the student as an emergency grant.