Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Finding 2022-076 Compliance with Federal Subrecipient Monitoring Requirements The Department receives federal grant funds directly from the federal government for the Highway Planning and Construction Program (Program) and then subgrants, or passes through, a portion of the funds to cities and counties and other organizations that are considered to be either a subrecipient or a contractor. A subrecipient is a non-federal entity that expends federal awards received from a pass-through entity to carry out a federal program, but does not include an individual that is a beneficiary receiving direct payments from such a program. A contractor is a dealer, distributor, merchant, or other seller providing goods or services that are required to conduct a federal program; these goods or services may be for an organization?s own use or for the use of beneficiaries of the federal program. The Department executes an Intergovemental Agreement (IGA) between the Department and the subrecipient. Under Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), the Department is responsible for evaluating each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward and for ultimately ensuring the subrecipient is determined eligible. In some instances, in coordination with the Federal Highway Association (FHWA), a Metropolitan Planning Organization (MPO)? rather than the primary recipient, such as the Department?is responsible for performing eligibility determinations. As such, in those instances, the Department does not perform risk-assessments on these contracts and only is responsible for on-going monitoring. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the Department had effective internal controls in place and complied with subrecipient monitoring activities for the Program during Fiscal Year 2022. As part of our audit work, we reviewed the Department?s internal controls over compliance for subrecipient monitoring requirements for the Program, including the Department?s policies and procedures. We tested a random sample of 25 of the Department?s 92 subrecipients (27 percent) for the Program?for which the Department had an IGA in place during Fiscal Year 2022?to determine whether subrecipient monitoring procedures performed by Department staff during the year were compliant with federal regulations. Our testing included evaluating whether the Department performed risk assessments and determined the appropriate level of subrecipient monitoring for the entities, as required by federal Uniform Guidance. How were the results of the audit work measured? Our audit work was designed to measure the Department?s compliance with the following criteria: ? Federal regulations [2 CFR 200.303] state that the Department, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? ? Federal regulations [2 CFR 200.332(b)] also state that the Department must evaluate each subrecipient?s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward and may include various factors. ? Federal regulations [2 CFR 200.332(d) through (f)] and [2 CFR 200.521] further require the Department to monitor the activities of its subrecipients, as necessary, to ensure that each subaward is used for authorized purposes, the subrecipient complies with the terms and conditions of the subaward, and that the subrecipient achieves performance goals. The Department?s monitoring must include: o Reviewing financial and programmatic reports submitted by the subrecipient o Following-up on and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award o Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity What problems did the audit work identify? We determined that the Department did not comply with subrecipient monitoring requirements for the Highway Planning and Construction Program during Fiscal Year 2022, as noted below: ? The Department did not perform a risk assessment for 6 of the 25 subrecipients (24 percent) we tested, including subrecipients where eligibility was determined by a MPO. ? The Department improperly included one vendor in our population of subrecipients. The nature of services provided by the vendor was personal services, therefore, did not require the execution of an IGA. ? The Department did not provide supporting documentation for reviews of any Fiscal Year 2022 financial and programmatic reports. As a result, we were unable to determine if any reviews were conducted during the fiscal year, as required. Why did these problems occur? While the Department has created a subrecipient monitoring and risk assessment manual, the manual lacks clarity in a variety of areas, including the following: ? For contracts which extend over multiple fiscal years, the policies do not specify the frequency in which subrecipient risk-assessment should be reviewed or updated. ? There are multiple types of subrecipient contracts for which the full risk-assessment process may not be applicable, however, the current policies do not address acceptable exceptions to the policy. ? The Department?s current policies do not include guidance related to the review of financial and programmatic reports, including the extent to which required programmatic and financial reports should be obtained and reviewed. ? The Department?s policies and procedures do not clearly indicate that the Department is not required to complete a risk assessment when an MPO determines eligibility and therefore the nature of monitoring procedures to be performed is not defined. ? Requested audit documentation was not provided timely. Further, the Department did not provide sufficiently-detailed training to staff to ensure they were aware of and conducted required subrecipient monitoring responsibilities. Why do these problems matter? Performing timely and appropriate monitoring of subrecipients provides the Department with a method to ensure its subrecipients are complying with applicable federal grant requirements. By taking appropriate actions based on the results of its subrecipient monitoring activities, the Department can mitigate the risk of providing continuing funding to entities that may not be using funds in accordance with program requirements. Overall, the Department?s failure to comply with federal requirements could result in a loss of funding from the federal government. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-076 The Department of Transportation should strengthen internal controls over and ensure that it complies with federal subrecipient monitoring requirements for the Highway Planning and Construction program by: A. Updating its current subrecipient monitoring and risk assessment policy to clarify the frequency in which a risk assessment is required to be completed or updated, as applicable for contracts that span multiple fiscal years, as well as direction regarding when it is acceptable to forgo performing a risk assessment and updating the policy to address the nature in which subrecipient programmatic and financial reports are reviewed B. Providing training to staff responsible for subrecipient monitoring activities related to the policies updated in Part A of the finding. Response Department of Transportation A. Agree Implementation Date: November 2023 The Department will update the policy to clarify the frequency in which the risk assessment is required to be completed or updated as applicable for contracts that span multiple fiscal years, as well as identifying exceptions, outlining when it is acceptable to forgo risk assessments. The Department will also update the policy to address the nature in which the subrecipient programmatic and financial reports are reviewed. The updates will be completed by November 2023. B. Agree Implementation Date: November 2023 The Department will provide training on the subrecipient monitoring policy manual to outline roles, responsibilities and the frequency of risk assessments that span over multiple fiscal years. The training will also provide guidance on the programmatic and financial information review process.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Finding 2022-064 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide emergency financial assistance to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the University under the Higher Education Emergency Relief Fund (HEERF I) Program. The federal Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the federal American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Each of the University?s campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (DOE) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements of the HEERF program there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The DOE specified that the Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The University?s campuses are required to submit the annual report directly to the DOE. During Fiscal Year 2022, each University campus was required to complete and post 8 reports (four Student Aid and four Institutional) to their website. During Fiscal Year 2022, the University?s three campuses in total expended approximately $60 million in HEERF grant funds: $27 million was expended by the Boulder campus, $10.5 million was expended by the Colorado Springs campus, and $22.5 million was expended by the Denver campus. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over and complied with the HEERF grant reporting requirements for Fiscal Year 2022. As part of our audit work, we tested the University?s campuses? internal controls over the HEERF grant reporting requirements. In addition, we tested 11 of the 12 student reports and 3 of the 12 institutional reports posted by the University during Fiscal Year 2022 to determine whether the University campuses posted the required information on each campus? website accurately, and by the federal due dates. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? The DOE issued a notice on May 13, 2021, requiring institutions to publicly post their required HEERF reports on the institution?s website as soon as possible, but no later than 30 days after the publication of the notice, or 30 days after the date the DOE first obligated funds under HEERF I, II, or III to the institution for emergency financial assistance to students; whichever comes later. The institution is required to post the report no later than 10 days after the end of each calendar quarter, after the initial posting. ? Federal regulation [2 CFR 200.303] states that the System?s campuses, as federal grant recipients, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? What problem did the audit work identify? We identified 2 out of the 14 reports tested (14.3 percent) that did not meet the HEERF grant report posting requirements. Specifically, the University of Colorado, Colorado Springs Campus, did not post the required information for the HEERF Student Aid Portion on its website for two of four quarters of Fiscal Year 2022 timely. First, the University posted the quarter-ending September 30, 2021 report to its website on December 23, 2021, or 74 days after the deadline of October 10. Second, the University did not post the quarter-ending March 31, 2022 report, which was due April 10, 2022, until October 2022, after we notified them of the error; this was approximately 6 months late. We did not identify any issues with the accuracy of the reports, and we found that the other two campuses in the University of Colorado System posted the required information on their respective websites as required by federal regulations. Why did this problem occur? The University?s Colorado Springs campus did not have adequate internal controls in place to ensure it complied with the HEERF grant reporting requirements. Specifically, the Colorado Springs Campus did not have appropriate policies and procedures in place for identifying and researching changes in HEERF reporting requirements. The federal government updated and provided a new form for HEERF reporting in September 2021 that included a section for institutional information but inadvertently excluded student information from the form. Because the form no longer required the student information, the Colorado Springs campus staff inaccurately assumed that the student information was no longer required to be reported. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in the DOE Certification and Agreement that is signed and agreed to by the University. By failing to report required information in accordance with federal regulations, the University failed to comply with the requirements of the HEERF program and potentially risks repercussions from the DOE as specified in the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-064 The University of Colorado?s Colorado Springs campus should strengthen its internal controls over and ensure that it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by establishing policies and procedures for identifying and researching changes in HEERF reporting requirements and posting reports to the campus website as required by federal regulations. Response University of Colorado Agree Implementation Date: Implemented Management agrees. After the notification of the missing HEERF report in December 2021, the UCCS Controller proposed a ?cross-check? process to ensure all future reporting is in compliance and reported in a timely manner. This process is used for both the quarterly and annual reporting process. In the quarterly reporting process, the UCCS Controller completes the institutional report and emails the report to the UCCS Financial Aid office Senior Executive Director for verification of the amounts and the data submitted. The Senior Executive Director then enters the student aid portion?s information and provides this to the UCCS Controller for verification of the data. Once verified, the report is uploaded to the UCCS website and a confirmation email is sent to the UCCS Controller as well as the heerfreporting@ed.gov for verification of completion of the website posting. This process has been duplicated with the annual reporting process. Before the annual report is submitted a review will be done to verify the report figures match the CU financials for the calendar year.
Finding 2022-062 Higher Education Emergency Relief Fund Student Aid Finding The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to higher education institutions, including the University, under the HEERF program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. Since March 11, 2021, the University has been awarded $45.6 million in HEERF grant funds through the American Rescue Plan (ARP), otherwise known as HEERF III. Of this award, the University was provided both 1) Student Aid monies, along with 2) Institutional Aid monies. Student Aid monies must be used to provide financial aid grants to students (including students exclusively enrolled in distance education), which may be used for ?any component of the student?s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, healthcare (including mental health care), or childcare. Institutional Aid monies may be used to defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll) and to make additional financial grants to students. During Fiscal Year 2022, the University spent $21.0 million for the Student Aid portion and $20.2 million for the Institutional portion of HEERF III funds. For the Student Aid portion of the HEERF III funding, the University divided the funding into different groups. The University developed a written plan (that applied during Fiscal Year 2022) for each group and a control process for awarding the monies to students. One of the groups of funding was to be awarded to students with unpaid balances in their tuition or auxiliary accounts with past due balances incurred during the 2020-2021 or 2021-2022 academic years. A team of University employees (CARES Team) was tasked with identifying those students, then contacting those students and asking if they would like the University to apply the student?s HEERF award to pay down the student?s account balance or pay it to the student directly. Once the student informed the University of their election, then the University awarded and disbursed the funds. What was the purpose of our audit work and what was performed? The purpose of the audit work was to determine whether the University was in compliance with the HEERF program regulations for awarding and paying the Student Aid portion of the HEERF funding, and whether proper controls were in place over the program during Fiscal Year 2022. Our testing included conducting interviews with management and selecting a sample of 60 disbursements made to students during Fiscal Year 2022 to test controls and compliance. We performed testing on the 60 disbursements to determine whether awards and disbursements were made in accordance with the University?s documented plan. How were the results of the audit work measured? In accordance with HEERF III requirements, the University must prioritize student aid distributions to students with exceptional needs. In addition, the University must have a documented plan to distribute funds to students. Federal regulations [2 CFR 200.303] require any non-federal grant award recipient to establish and maintain effective internal control over the federal award that provides reasonable assurance that the grant award recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Lastly, student aid application best practices discourage employees from awarding aid to family members. What problem did the audit work identify? Based on interviews with University management, the University identified that a University employee inappropriately provided $700 in HEERF Student Aid funding to the employee?s family member who was a student at the University but was not eligible to receive the funds. Specifically, the CARES Team selected students to receive these funds that met the following criteria: 1) Student was enrolled in the Fall of 2021 or Spring 2022, 2) student had past due balances incurred during the 2020-2021 or 2021-2022 academic years, 3) the student was in good academic standing, and 4) they were participating in a payment plan or in the College Completion Advising program. The student was not selected by the CARES Team as eligible to receive these funds. During our testing of additional 60 student disbursement transactions we found no other exceptions. Why did this problem occur? The University has not established proper segregation of duties to prevent University employees from awarding federal funding to a member of their family. Specifically, the employee had access rights within the University?s financial aid system that granted the employee the ability to both award and disburse federal funds without another employee reviewing or approving. In addition, the University did not have a written policy, as recommended by industry best practices, that prohibits employees from applying aid to family members? accounts. Why does this problem matter? Federal funds that are misapplied or used for unallowable purposes could be subject to repayment from the University to the federal granting agency. Without ensuring adequate segregation of duties within the University?s financial aid system for awarding and disbursing federal funds, the University increases the risk that fraud could occur. In the instance identified, the University recovered the funding from the student. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-062 Metropolitan State University of Denver (University) should improve its internal controls over federal Higher Education Emergency Relief Funds by instituting appropriate segregation of duties over the awarding of federal funds to students. This should include requiring that no one employee can both award then disburse aid to students and developing and implementing a formal written policy that prohibits University employees from awarding financial aid to their family members. Response Metropolitan State University Agree Implementation Date: June 2023 In January 2023, the Executive Director of Financial Aid and Scholarships implemented a code of conduct that addresses and prohibits University personnel from awarding financial aid to their family members or other persons considered conflicts of interest. The Office of Financial Aid and Scholarships will draft policy by June 30, 2023, to address the segregation of duties that prohibits awarding and disbursing federal, state, or institutional funding to students by one employee.
Finding 2022-063 Higher Education Emergency Relief Fund Reporting Compliance Finding The CARES Act was signed into law on March 27, 2020, and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the (HEERF Program. CRRSAA was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Since April 2020, the University has been awarded a total of $86.3 million in HEERF funding. From inception through June 30, 2022, the University spent $35.4 million for the HEERF program Student Aid Portion and $48.9 million for the HEERF program Institutional Portion. The University reports that it will spend the remaining amount of funding during Fiscal Year 2023. The University signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate the University?s acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The ED specified that Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The annual report is to be submitted directly to the federal ED. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University had adequate internal controls in place over and complied with HEERF Institutional and Student Aid Portion grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the University?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 5 of the 8 HEERF reports submitted by the University during Fiscal Year 2022 to determine whether the reports were posted on the University?s primary website or submitted directly to the ED by the federal due dates and complied with federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? For the Student Aid Portion, beginning on May 6, 2020, the ED required institutions to publicly post certain information on their website, including the number of awards distributed to students, the total amount awarded, and the methodologies used by the institution to determine which students receive awards, no later than 30 days after the award date, and to update that information every 45 days thereafter (by posting a new report). ? On August 31, 2020, the ED revised the reporting requirement by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. This revision from every 45 days to a calendar quarter was effective for the first calendar quarter report due by October 10, 2020, and covering the period from after the institution?s last report through the end of the calendar quarter on September 30, 2020. ? For the Institutional Portion, a federal form filled out by the institution must be posted on the institution?s website covering aggregate expenditure amounts for each calendar quarter (September 30, December 31, March 31, and June 30) and concluding after an institution has spent the institutional portion of their HEERF Funds. The institution must post their first report by October 30, 2020, the first quarter of 2021 report by July 20, 2021, and post all other reports no later than 10 days after the end of each calendar quarter (October 10, January 10, April 10, and July 10). ? Section 18004(e) of the CARES Act and Section 314(e) of the CRRSAA require an institution receiving funds under HEERF to submit a report to the Secretary of the ED at ?such time in such a manner as the Secretary may require?. ? Federal regulation [2 CFR 200.334] states that ?financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.? The instructions for the Quarterly HEERF Reporting Form notes, ?any changes or updates after the initial posting must be conspicuously noted after initial posting and the date of the change must be noted in the `Date of Report? line.? ? Federal regulation [2 CFR 200.303] states that the University, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The University signed a HEERF Certification and Agreement to accept the funding and acknowledge its responsibilities under the grant; therefore, the University was responsible under the Agreement to ensure that it complied with HEERF reporting and other requirements. What problems did the audit work identify? We determined that 2 out of 5 reports tested (40 percent) did not meet the HEERF grant report posting requirements. Specifically: ? The University did not post the HEERF CRRSAA Student quarterly report for the quarter ending September 30, 2021 on the University?s primary website, as required. ? The University published the HEERF ARP Student quarterly report for the quarter ending March 31, 2022 on May 26, 2022?46 days past the due date of April 10, 2022. No issues were noted on the accuracy of the financial information on this report. Why did these problems occur? The University did not implement adequate internal controls to ensure it complied with the HEERF grant reporting requirements. Specifically, the University did not have appropriate policies and procedures in place to ensure that staff submit the required reports within federally required timeframes. Why do these problems matter? Federal oversight agencies, including ED, depend on accurate reports to measure program results and states? compliance with federal requirements. By failing to report the HEERF spending information in accordance with federal regulations, the University failed to comply with the requirements of the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-063 Metropolitan State University of Denver (University) should strengthen its internal controls over reporting and ensure it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by developing and documenting policies and procedures for identifying and researching the specific reporting requirements and ensuring that staff post to the University?s website the required reports within federally required timeframes. In addition, the University should ensure that all the HEERF reports that are currently required to be posted are on the website. Response Metropolitan State University Agree Implementation Date: December 2022 In December 2022, the Office of Financial Aid strengthened its internal control over the reporting requirements for the Higher Education Emergency Relief Fund (HEERF), by adding the report due dates to the internal operational calendar. Additional level reviews were also added to the submission process before the required reports will be sent to the Department of Education and posted on the financial aid website.
Finding 2022-059 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF I) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund (Assistance Listing No. 84.425). The HEERF program contains two portions: the Student Aid portion (Assistance Listing No. 84.425E) and the Institutional portion, which is made up of the following: HEERF Institutional Aid Portion (Assistance Listing No. 84.425F), HEERF Minority Serving Institutions (Assistance Listing No. 84.425L), HEERF Strengthening Institutions Program (Assistance Listing No. 84.425M), Institutional Resilience and Expanded Postsecondary Opportunity (Assistance Listing No. 84.425P), and HEERF Supplemental Assistance to Institutions of Higher Education program (Assistance Listing No. 84.425S). Amounts provided to students through HEERF are considered to be ?Emergency Financial Aid Grants to Students? under the Program. Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent approximately $97.8 million for the HEERF program Student Aid portion which is used to award Emergency Financial Aid Grants to students and $113.9 million for the HEERF Institutional Portion, which is used to support the colleges. $117.3 of this amount was expended by the System during Fiscal Year 2022. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the ED to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The annual report is to be submitted directly to the ED. The ED has specified certain criteria that must be included in each report. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System had adequate internal controls in place over, and complied with, the HEERF Institutional and Student Aid grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the System?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 25 of the 117 HEERF reports submitted by the System?s campuses during Fiscal Year 2022 to determine whether the reports were posted on each campus? primary website (quarterly reports) or submitted to ED (annual reports) by the federal due dates. Furthermore, for the Student Aid Quarterly Report we requested from each Campus the underlying support for the reports, which consisted of student data detailing how much aid was awarded and the methods the campuses used to determine which students would receive Emergency Financial Aid Grants. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? On May 13, 2021, the ED published in the Federal Register a notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. The following information must appear in a format and location that is easily accessible to the public: o An acknowledgement that the institution signed and returned to the ED the Certification and Agreement and the assurance that the institution has used the applicable amount of funds designated under the CRRSAA and ARP programs to provide Emergency Financial Aid Grants to Students. o The total amount of funds that the institution will receive or has received from the ED pursuant to the institution's Certification and Agreement for Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total amount of Emergency Financial Aid Grants distributed to students under the CRRSAA and ARP programs as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). o The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total number of students who have received an Emergency Financial Aid Grant to students under the CRRSAA and ARP programs. o The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CRRSAA and ARP programs. o Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants. ? Federal Uniform Guidance [2 CFR 200.303] requires that recipients of federal awards have internal controls in place to ensure that federal reports are accurate and report complete information. Appropriate supporting documentation is evidence of such internal controls. What problems did the audit work identify? We identified issues with 5 of the 25 Fiscal Year 2022 reports we tested (20 percent). Specifically, Front Range Community College (FRCC), Pueblo Community College (PCC), and Lamar Community College (LCC) could not provide appropriate supporting documentation for one or more of the following data elements in five of the Student Aid Quarterly Reports: student data detailing (a) the total amount of Emergency Financial Aid Grants distributed to students, (b) the total number of students eligible to receive Emergency Financial Aid Grants and/or (c) the total number of students at the institution who have received an Emergency Financial Aid Grant. The specific issues we found the following: ? FRCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended September 30, 2021 as 20,684; based on our review, we determined the supported number was 20,782. ? FRCC reported the total number of students at the institution who have received an Emergency Financial Aid Grant for the quarter ended June 30, 2022 as 20,385 (student portion) and 3,207 (institutional portion); based on our review, we determined the supported numbers were 20,401 and 3,222, respectively. ? LCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended June 30, 2022 as 1,007; based on our review, we determined the supported number was 1,034. In addition, the amount disbursed directly to student emergency financial aid grants to date was reported as 961 and total for all HEERF funds was 1,124; based on our review, we determined the supported numbers were 988 and 1,151, respectively. ? PCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarters ending September 30, 2021 and December 31, 2021 as 3,191; based on our review, we determined this amount could not be supported and PCC did not provide a revised count. Why did these problems occur? FRCC, PCC, and LCC campuses did not have procedures in place to ensure that supporting documentation was maintained for its Student Aid Quarterly Reporting. Employee turnover in the FRCC Controller position and FRCC, PCC, and LCC Student Financial Aid Director positions further contributed to FRCC, PCC, and LCC?s inability to locate or recreate the supporting documentation. Why do these problems matter? It is important for FRCC, PCC, and LCC to ensure that they obtain and maintain appropriate documentation to support amounts reported to federal awarding agencies, especially when they are the basis for determining FRCC, PCC, and LCC?s compliance with specific federal program requirements. This issue could lead to inaccurate federal reporting and potential noncompliance, which could result in the federal government requiring FRCC, PCC, and LCC to return funds or a negative impact to the System?s future federal program funding. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-059 Front Range Community College, Lamar Community College, and Pueblo Community College campuses should strengthen their internal controls over federal reporting and ensure they comply with the Higher Education Emergency Relief Fund reporting requirements by reviewing reports for accuracy and developing procedures for ensuring the required maintenance of all related supporting documentation. Response Front Range Community College Agree Implementation Date: September 2022 Moving forward the Director of Financial Aid will engage the Restricted Funds Accountants in a quality assurance review of both dollars spent, type of fund, and student counts before it is submitted for final review and publishing by the Director of Resource Development and Senior Grant Administrator. The most recently submitted information for the quarterly report of September 30, 2022 will be sent to the Restricted Funds Accountants to validate that FRCC has been and will continue to be in compliance for quarterly HEERF reporting. Response Lamar Community College Agree Implementation Date: July 2022 The Financial Aid Director and the Controller will compile their reporting support on the shared drive they utilize for other routine purposes as well, to ensure clear documentation of the numbers reported. The original report containing errors was corrected, validated, and reposted. All past year?s reporting data was made available on the shared drive as of July 2022. Response Pueblo Community College Agree Implementation Date: October 2022 Each quarter Financial aid will obtain and compare Cognos and Banner disbursement reports for accuracy. Once the unduplicated student count is determined it will be sent to the Vice President of Student Success to validate and approve going forward. Financial aid will ensure staff maintain supporting documentation for any institutional expenditures information that was obtained from the fiscal office. Disbursement and expenditure data will be compiled for the Department of Education?s Quarterly Report by the submission deadline and will be submitted as PDF to webmaster for posting on PCC?s website and a copy emailed to a contact at the Department of Education and will archive the submission for future reference.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Finding 2022-064 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide emergency financial assistance to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the University under the Higher Education Emergency Relief Fund (HEERF I) Program. The federal Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the federal American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Each of the University?s campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (DOE) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements of the HEERF program there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The DOE specified that the Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The University?s campuses are required to submit the annual report directly to the DOE. During Fiscal Year 2022, each University campus was required to complete and post 8 reports (four Student Aid and four Institutional) to their website. During Fiscal Year 2022, the University?s three campuses in total expended approximately $60 million in HEERF grant funds: $27 million was expended by the Boulder campus, $10.5 million was expended by the Colorado Springs campus, and $22.5 million was expended by the Denver campus. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over and complied with the HEERF grant reporting requirements for Fiscal Year 2022. As part of our audit work, we tested the University?s campuses? internal controls over the HEERF grant reporting requirements. In addition, we tested 11 of the 12 student reports and 3 of the 12 institutional reports posted by the University during Fiscal Year 2022 to determine whether the University campuses posted the required information on each campus? website accurately, and by the federal due dates. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? The DOE issued a notice on May 13, 2021, requiring institutions to publicly post their required HEERF reports on the institution?s website as soon as possible, but no later than 30 days after the publication of the notice, or 30 days after the date the DOE first obligated funds under HEERF I, II, or III to the institution for emergency financial assistance to students; whichever comes later. The institution is required to post the report no later than 10 days after the end of each calendar quarter, after the initial posting. ? Federal regulation [2 CFR 200.303] states that the System?s campuses, as federal grant recipients, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? What problem did the audit work identify? We identified 2 out of the 14 reports tested (14.3 percent) that did not meet the HEERF grant report posting requirements. Specifically, the University of Colorado, Colorado Springs Campus, did not post the required information for the HEERF Student Aid Portion on its website for two of four quarters of Fiscal Year 2022 timely. First, the University posted the quarter-ending September 30, 2021 report to its website on December 23, 2021, or 74 days after the deadline of October 10. Second, the University did not post the quarter-ending March 31, 2022 report, which was due April 10, 2022, until October 2022, after we notified them of the error; this was approximately 6 months late. We did not identify any issues with the accuracy of the reports, and we found that the other two campuses in the University of Colorado System posted the required information on their respective websites as required by federal regulations. Why did this problem occur? The University?s Colorado Springs campus did not have adequate internal controls in place to ensure it complied with the HEERF grant reporting requirements. Specifically, the Colorado Springs Campus did not have appropriate policies and procedures in place for identifying and researching changes in HEERF reporting requirements. The federal government updated and provided a new form for HEERF reporting in September 2021 that included a section for institutional information but inadvertently excluded student information from the form. Because the form no longer required the student information, the Colorado Springs campus staff inaccurately assumed that the student information was no longer required to be reported. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in the DOE Certification and Agreement that is signed and agreed to by the University. By failing to report required information in accordance with federal regulations, the University failed to comply with the requirements of the HEERF program and potentially risks repercussions from the DOE as specified in the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-064 The University of Colorado?s Colorado Springs campus should strengthen its internal controls over and ensure that it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by establishing policies and procedures for identifying and researching changes in HEERF reporting requirements and posting reports to the campus website as required by federal regulations. Response University of Colorado Agree Implementation Date: Implemented Management agrees. After the notification of the missing HEERF report in December 2021, the UCCS Controller proposed a ?cross-check? process to ensure all future reporting is in compliance and reported in a timely manner. This process is used for both the quarterly and annual reporting process. In the quarterly reporting process, the UCCS Controller completes the institutional report and emails the report to the UCCS Financial Aid office Senior Executive Director for verification of the amounts and the data submitted. The Senior Executive Director then enters the student aid portion?s information and provides this to the UCCS Controller for verification of the data. Once verified, the report is uploaded to the UCCS website and a confirmation email is sent to the UCCS Controller as well as the heerfreporting@ed.gov for verification of completion of the website posting. This process has been duplicated with the annual reporting process. Before the annual report is submitted a review will be done to verify the report figures match the CU financials for the calendar year.
Finding 2022-062 Higher Education Emergency Relief Fund Student Aid Finding The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to higher education institutions, including the University, under the HEERF program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. Since March 11, 2021, the University has been awarded $45.6 million in HEERF grant funds through the American Rescue Plan (ARP), otherwise known as HEERF III. Of this award, the University was provided both 1) Student Aid monies, along with 2) Institutional Aid monies. Student Aid monies must be used to provide financial aid grants to students (including students exclusively enrolled in distance education), which may be used for ?any component of the student?s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, healthcare (including mental health care), or childcare. Institutional Aid monies may be used to defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll) and to make additional financial grants to students. During Fiscal Year 2022, the University spent $21.0 million for the Student Aid portion and $20.2 million for the Institutional portion of HEERF III funds. For the Student Aid portion of the HEERF III funding, the University divided the funding into different groups. The University developed a written plan (that applied during Fiscal Year 2022) for each group and a control process for awarding the monies to students. One of the groups of funding was to be awarded to students with unpaid balances in their tuition or auxiliary accounts with past due balances incurred during the 2020-2021 or 2021-2022 academic years. A team of University employees (CARES Team) was tasked with identifying those students, then contacting those students and asking if they would like the University to apply the student?s HEERF award to pay down the student?s account balance or pay it to the student directly. Once the student informed the University of their election, then the University awarded and disbursed the funds. What was the purpose of our audit work and what was performed? The purpose of the audit work was to determine whether the University was in compliance with the HEERF program regulations for awarding and paying the Student Aid portion of the HEERF funding, and whether proper controls were in place over the program during Fiscal Year 2022. Our testing included conducting interviews with management and selecting a sample of 60 disbursements made to students during Fiscal Year 2022 to test controls and compliance. We performed testing on the 60 disbursements to determine whether awards and disbursements were made in accordance with the University?s documented plan. How were the results of the audit work measured? In accordance with HEERF III requirements, the University must prioritize student aid distributions to students with exceptional needs. In addition, the University must have a documented plan to distribute funds to students. Federal regulations [2 CFR 200.303] require any non-federal grant award recipient to establish and maintain effective internal control over the federal award that provides reasonable assurance that the grant award recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Lastly, student aid application best practices discourage employees from awarding aid to family members. What problem did the audit work identify? Based on interviews with University management, the University identified that a University employee inappropriately provided $700 in HEERF Student Aid funding to the employee?s family member who was a student at the University but was not eligible to receive the funds. Specifically, the CARES Team selected students to receive these funds that met the following criteria: 1) Student was enrolled in the Fall of 2021 or Spring 2022, 2) student had past due balances incurred during the 2020-2021 or 2021-2022 academic years, 3) the student was in good academic standing, and 4) they were participating in a payment plan or in the College Completion Advising program. The student was not selected by the CARES Team as eligible to receive these funds. During our testing of additional 60 student disbursement transactions we found no other exceptions. Why did this problem occur? The University has not established proper segregation of duties to prevent University employees from awarding federal funding to a member of their family. Specifically, the employee had access rights within the University?s financial aid system that granted the employee the ability to both award and disburse federal funds without another employee reviewing or approving. In addition, the University did not have a written policy, as recommended by industry best practices, that prohibits employees from applying aid to family members? accounts. Why does this problem matter? Federal funds that are misapplied or used for unallowable purposes could be subject to repayment from the University to the federal granting agency. Without ensuring adequate segregation of duties within the University?s financial aid system for awarding and disbursing federal funds, the University increases the risk that fraud could occur. In the instance identified, the University recovered the funding from the student. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-062 Metropolitan State University of Denver (University) should improve its internal controls over federal Higher Education Emergency Relief Funds by instituting appropriate segregation of duties over the awarding of federal funds to students. This should include requiring that no one employee can both award then disburse aid to students and developing and implementing a formal written policy that prohibits University employees from awarding financial aid to their family members. Response Metropolitan State University Agree Implementation Date: June 2023 In January 2023, the Executive Director of Financial Aid and Scholarships implemented a code of conduct that addresses and prohibits University personnel from awarding financial aid to their family members or other persons considered conflicts of interest. The Office of Financial Aid and Scholarships will draft policy by June 30, 2023, to address the segregation of duties that prohibits awarding and disbursing federal, state, or institutional funding to students by one employee.
Finding 2022-063 Higher Education Emergency Relief Fund Reporting Compliance Finding The CARES Act was signed into law on March 27, 2020, and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the (HEERF Program. CRRSAA was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Since April 2020, the University has been awarded a total of $86.3 million in HEERF funding. From inception through June 30, 2022, the University spent $35.4 million for the HEERF program Student Aid Portion and $48.9 million for the HEERF program Institutional Portion. The University reports that it will spend the remaining amount of funding during Fiscal Year 2023. The University signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate the University?s acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The ED specified that Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The annual report is to be submitted directly to the federal ED. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University had adequate internal controls in place over and complied with HEERF Institutional and Student Aid Portion grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the University?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 5 of the 8 HEERF reports submitted by the University during Fiscal Year 2022 to determine whether the reports were posted on the University?s primary website or submitted directly to the ED by the federal due dates and complied with federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? For the Student Aid Portion, beginning on May 6, 2020, the ED required institutions to publicly post certain information on their website, including the number of awards distributed to students, the total amount awarded, and the methodologies used by the institution to determine which students receive awards, no later than 30 days after the award date, and to update that information every 45 days thereafter (by posting a new report). ? On August 31, 2020, the ED revised the reporting requirement by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. This revision from every 45 days to a calendar quarter was effective for the first calendar quarter report due by October 10, 2020, and covering the period from after the institution?s last report through the end of the calendar quarter on September 30, 2020. ? For the Institutional Portion, a federal form filled out by the institution must be posted on the institution?s website covering aggregate expenditure amounts for each calendar quarter (September 30, December 31, March 31, and June 30) and concluding after an institution has spent the institutional portion of their HEERF Funds. The institution must post their first report by October 30, 2020, the first quarter of 2021 report by July 20, 2021, and post all other reports no later than 10 days after the end of each calendar quarter (October 10, January 10, April 10, and July 10). ? Section 18004(e) of the CARES Act and Section 314(e) of the CRRSAA require an institution receiving funds under HEERF to submit a report to the Secretary of the ED at ?such time in such a manner as the Secretary may require?. ? Federal regulation [2 CFR 200.334] states that ?financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.? The instructions for the Quarterly HEERF Reporting Form notes, ?any changes or updates after the initial posting must be conspicuously noted after initial posting and the date of the change must be noted in the `Date of Report? line.? ? Federal regulation [2 CFR 200.303] states that the University, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The University signed a HEERF Certification and Agreement to accept the funding and acknowledge its responsibilities under the grant; therefore, the University was responsible under the Agreement to ensure that it complied with HEERF reporting and other requirements. What problems did the audit work identify? We determined that 2 out of 5 reports tested (40 percent) did not meet the HEERF grant report posting requirements. Specifically: ? The University did not post the HEERF CRRSAA Student quarterly report for the quarter ending September 30, 2021 on the University?s primary website, as required. ? The University published the HEERF ARP Student quarterly report for the quarter ending March 31, 2022 on May 26, 2022?46 days past the due date of April 10, 2022. No issues were noted on the accuracy of the financial information on this report. Why did these problems occur? The University did not implement adequate internal controls to ensure it complied with the HEERF grant reporting requirements. Specifically, the University did not have appropriate policies and procedures in place to ensure that staff submit the required reports within federally required timeframes. Why do these problems matter? Federal oversight agencies, including ED, depend on accurate reports to measure program results and states? compliance with federal requirements. By failing to report the HEERF spending information in accordance with federal regulations, the University failed to comply with the requirements of the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-063 Metropolitan State University of Denver (University) should strengthen its internal controls over reporting and ensure it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by developing and documenting policies and procedures for identifying and researching the specific reporting requirements and ensuring that staff post to the University?s website the required reports within federally required timeframes. In addition, the University should ensure that all the HEERF reports that are currently required to be posted are on the website. Response Metropolitan State University Agree Implementation Date: December 2022 In December 2022, the Office of Financial Aid strengthened its internal control over the reporting requirements for the Higher Education Emergency Relief Fund (HEERF), by adding the report due dates to the internal operational calendar. Additional level reviews were also added to the submission process before the required reports will be sent to the Department of Education and posted on the financial aid website.
Finding 2022-059 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF I) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund (Assistance Listing No. 84.425). The HEERF program contains two portions: the Student Aid portion (Assistance Listing No. 84.425E) and the Institutional portion, which is made up of the following: HEERF Institutional Aid Portion (Assistance Listing No. 84.425F), HEERF Minority Serving Institutions (Assistance Listing No. 84.425L), HEERF Strengthening Institutions Program (Assistance Listing No. 84.425M), Institutional Resilience and Expanded Postsecondary Opportunity (Assistance Listing No. 84.425P), and HEERF Supplemental Assistance to Institutions of Higher Education program (Assistance Listing No. 84.425S). Amounts provided to students through HEERF are considered to be ?Emergency Financial Aid Grants to Students? under the Program. Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent approximately $97.8 million for the HEERF program Student Aid portion which is used to award Emergency Financial Aid Grants to students and $113.9 million for the HEERF Institutional Portion, which is used to support the colleges. $117.3 of this amount was expended by the System during Fiscal Year 2022. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the ED to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The annual report is to be submitted directly to the ED. The ED has specified certain criteria that must be included in each report. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System had adequate internal controls in place over, and complied with, the HEERF Institutional and Student Aid grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the System?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 25 of the 117 HEERF reports submitted by the System?s campuses during Fiscal Year 2022 to determine whether the reports were posted on each campus? primary website (quarterly reports) or submitted to ED (annual reports) by the federal due dates. Furthermore, for the Student Aid Quarterly Report we requested from each Campus the underlying support for the reports, which consisted of student data detailing how much aid was awarded and the methods the campuses used to determine which students would receive Emergency Financial Aid Grants. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? On May 13, 2021, the ED published in the Federal Register a notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. The following information must appear in a format and location that is easily accessible to the public: o An acknowledgement that the institution signed and returned to the ED the Certification and Agreement and the assurance that the institution has used the applicable amount of funds designated under the CRRSAA and ARP programs to provide Emergency Financial Aid Grants to Students. o The total amount of funds that the institution will receive or has received from the ED pursuant to the institution's Certification and Agreement for Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total amount of Emergency Financial Aid Grants distributed to students under the CRRSAA and ARP programs as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). o The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total number of students who have received an Emergency Financial Aid Grant to students under the CRRSAA and ARP programs. o The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CRRSAA and ARP programs. o Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants. ? Federal Uniform Guidance [2 CFR 200.303] requires that recipients of federal awards have internal controls in place to ensure that federal reports are accurate and report complete information. Appropriate supporting documentation is evidence of such internal controls. What problems did the audit work identify? We identified issues with 5 of the 25 Fiscal Year 2022 reports we tested (20 percent). Specifically, Front Range Community College (FRCC), Pueblo Community College (PCC), and Lamar Community College (LCC) could not provide appropriate supporting documentation for one or more of the following data elements in five of the Student Aid Quarterly Reports: student data detailing (a) the total amount of Emergency Financial Aid Grants distributed to students, (b) the total number of students eligible to receive Emergency Financial Aid Grants and/or (c) the total number of students at the institution who have received an Emergency Financial Aid Grant. The specific issues we found the following: ? FRCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended September 30, 2021 as 20,684; based on our review, we determined the supported number was 20,782. ? FRCC reported the total number of students at the institution who have received an Emergency Financial Aid Grant for the quarter ended June 30, 2022 as 20,385 (student portion) and 3,207 (institutional portion); based on our review, we determined the supported numbers were 20,401 and 3,222, respectively. ? LCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended June 30, 2022 as 1,007; based on our review, we determined the supported number was 1,034. In addition, the amount disbursed directly to student emergency financial aid grants to date was reported as 961 and total for all HEERF funds was 1,124; based on our review, we determined the supported numbers were 988 and 1,151, respectively. ? PCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarters ending September 30, 2021 and December 31, 2021 as 3,191; based on our review, we determined this amount could not be supported and PCC did not provide a revised count. Why did these problems occur? FRCC, PCC, and LCC campuses did not have procedures in place to ensure that supporting documentation was maintained for its Student Aid Quarterly Reporting. Employee turnover in the FRCC Controller position and FRCC, PCC, and LCC Student Financial Aid Director positions further contributed to FRCC, PCC, and LCC?s inability to locate or recreate the supporting documentation. Why do these problems matter? It is important for FRCC, PCC, and LCC to ensure that they obtain and maintain appropriate documentation to support amounts reported to federal awarding agencies, especially when they are the basis for determining FRCC, PCC, and LCC?s compliance with specific federal program requirements. This issue could lead to inaccurate federal reporting and potential noncompliance, which could result in the federal government requiring FRCC, PCC, and LCC to return funds or a negative impact to the System?s future federal program funding. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-059 Front Range Community College, Lamar Community College, and Pueblo Community College campuses should strengthen their internal controls over federal reporting and ensure they comply with the Higher Education Emergency Relief Fund reporting requirements by reviewing reports for accuracy and developing procedures for ensuring the required maintenance of all related supporting documentation. Response Front Range Community College Agree Implementation Date: September 2022 Moving forward the Director of Financial Aid will engage the Restricted Funds Accountants in a quality assurance review of both dollars spent, type of fund, and student counts before it is submitted for final review and publishing by the Director of Resource Development and Senior Grant Administrator. The most recently submitted information for the quarterly report of September 30, 2022 will be sent to the Restricted Funds Accountants to validate that FRCC has been and will continue to be in compliance for quarterly HEERF reporting. Response Lamar Community College Agree Implementation Date: July 2022 The Financial Aid Director and the Controller will compile their reporting support on the shared drive they utilize for other routine purposes as well, to ensure clear documentation of the numbers reported. The original report containing errors was corrected, validated, and reposted. All past year?s reporting data was made available on the shared drive as of July 2022. Response Pueblo Community College Agree Implementation Date: October 2022 Each quarter Financial aid will obtain and compare Cognos and Banner disbursement reports for accuracy. Once the unduplicated student count is determined it will be sent to the Vice President of Student Success to validate and approve going forward. Financial aid will ensure staff maintain supporting documentation for any institutional expenditures information that was obtained from the fiscal office. Disbursement and expenditure data will be compiled for the Department of Education?s Quarterly Report by the submission deadline and will be submitted as PDF to webmaster for posting on PCC?s website and a copy emailed to a contact at the Department of Education and will archive the submission for future reference.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Finding 2022-064 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide emergency financial assistance to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the University under the Higher Education Emergency Relief Fund (HEERF I) Program. The federal Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the federal American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Each of the University?s campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (DOE) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements of the HEERF program there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The DOE specified that the Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The University?s campuses are required to submit the annual report directly to the DOE. During Fiscal Year 2022, each University campus was required to complete and post 8 reports (four Student Aid and four Institutional) to their website. During Fiscal Year 2022, the University?s three campuses in total expended approximately $60 million in HEERF grant funds: $27 million was expended by the Boulder campus, $10.5 million was expended by the Colorado Springs campus, and $22.5 million was expended by the Denver campus. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over and complied with the HEERF grant reporting requirements for Fiscal Year 2022. As part of our audit work, we tested the University?s campuses? internal controls over the HEERF grant reporting requirements. In addition, we tested 11 of the 12 student reports and 3 of the 12 institutional reports posted by the University during Fiscal Year 2022 to determine whether the University campuses posted the required information on each campus? website accurately, and by the federal due dates. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? The DOE issued a notice on May 13, 2021, requiring institutions to publicly post their required HEERF reports on the institution?s website as soon as possible, but no later than 30 days after the publication of the notice, or 30 days after the date the DOE first obligated funds under HEERF I, II, or III to the institution for emergency financial assistance to students; whichever comes later. The institution is required to post the report no later than 10 days after the end of each calendar quarter, after the initial posting. ? Federal regulation [2 CFR 200.303] states that the System?s campuses, as federal grant recipients, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? What problem did the audit work identify? We identified 2 out of the 14 reports tested (14.3 percent) that did not meet the HEERF grant report posting requirements. Specifically, the University of Colorado, Colorado Springs Campus, did not post the required information for the HEERF Student Aid Portion on its website for two of four quarters of Fiscal Year 2022 timely. First, the University posted the quarter-ending September 30, 2021 report to its website on December 23, 2021, or 74 days after the deadline of October 10. Second, the University did not post the quarter-ending March 31, 2022 report, which was due April 10, 2022, until October 2022, after we notified them of the error; this was approximately 6 months late. We did not identify any issues with the accuracy of the reports, and we found that the other two campuses in the University of Colorado System posted the required information on their respective websites as required by federal regulations. Why did this problem occur? The University?s Colorado Springs campus did not have adequate internal controls in place to ensure it complied with the HEERF grant reporting requirements. Specifically, the Colorado Springs Campus did not have appropriate policies and procedures in place for identifying and researching changes in HEERF reporting requirements. The federal government updated and provided a new form for HEERF reporting in September 2021 that included a section for institutional information but inadvertently excluded student information from the form. Because the form no longer required the student information, the Colorado Springs campus staff inaccurately assumed that the student information was no longer required to be reported. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in the DOE Certification and Agreement that is signed and agreed to by the University. By failing to report required information in accordance with federal regulations, the University failed to comply with the requirements of the HEERF program and potentially risks repercussions from the DOE as specified in the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-064 The University of Colorado?s Colorado Springs campus should strengthen its internal controls over and ensure that it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by establishing policies and procedures for identifying and researching changes in HEERF reporting requirements and posting reports to the campus website as required by federal regulations. Response University of Colorado Agree Implementation Date: Implemented Management agrees. After the notification of the missing HEERF report in December 2021, the UCCS Controller proposed a ?cross-check? process to ensure all future reporting is in compliance and reported in a timely manner. This process is used for both the quarterly and annual reporting process. In the quarterly reporting process, the UCCS Controller completes the institutional report and emails the report to the UCCS Financial Aid office Senior Executive Director for verification of the amounts and the data submitted. The Senior Executive Director then enters the student aid portion?s information and provides this to the UCCS Controller for verification of the data. Once verified, the report is uploaded to the UCCS website and a confirmation email is sent to the UCCS Controller as well as the heerfreporting@ed.gov for verification of completion of the website posting. This process has been duplicated with the annual reporting process. Before the annual report is submitted a review will be done to verify the report figures match the CU financials for the calendar year.
Finding 2022-062 Higher Education Emergency Relief Fund Student Aid Finding The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to higher education institutions, including the University, under the HEERF program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. Since March 11, 2021, the University has been awarded $45.6 million in HEERF grant funds through the American Rescue Plan (ARP), otherwise known as HEERF III. Of this award, the University was provided both 1) Student Aid monies, along with 2) Institutional Aid monies. Student Aid monies must be used to provide financial aid grants to students (including students exclusively enrolled in distance education), which may be used for ?any component of the student?s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, healthcare (including mental health care), or childcare. Institutional Aid monies may be used to defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll) and to make additional financial grants to students. During Fiscal Year 2022, the University spent $21.0 million for the Student Aid portion and $20.2 million for the Institutional portion of HEERF III funds. For the Student Aid portion of the HEERF III funding, the University divided the funding into different groups. The University developed a written plan (that applied during Fiscal Year 2022) for each group and a control process for awarding the monies to students. One of the groups of funding was to be awarded to students with unpaid balances in their tuition or auxiliary accounts with past due balances incurred during the 2020-2021 or 2021-2022 academic years. A team of University employees (CARES Team) was tasked with identifying those students, then contacting those students and asking if they would like the University to apply the student?s HEERF award to pay down the student?s account balance or pay it to the student directly. Once the student informed the University of their election, then the University awarded and disbursed the funds. What was the purpose of our audit work and what was performed? The purpose of the audit work was to determine whether the University was in compliance with the HEERF program regulations for awarding and paying the Student Aid portion of the HEERF funding, and whether proper controls were in place over the program during Fiscal Year 2022. Our testing included conducting interviews with management and selecting a sample of 60 disbursements made to students during Fiscal Year 2022 to test controls and compliance. We performed testing on the 60 disbursements to determine whether awards and disbursements were made in accordance with the University?s documented plan. How were the results of the audit work measured? In accordance with HEERF III requirements, the University must prioritize student aid distributions to students with exceptional needs. In addition, the University must have a documented plan to distribute funds to students. Federal regulations [2 CFR 200.303] require any non-federal grant award recipient to establish and maintain effective internal control over the federal award that provides reasonable assurance that the grant award recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Lastly, student aid application best practices discourage employees from awarding aid to family members. What problem did the audit work identify? Based on interviews with University management, the University identified that a University employee inappropriately provided $700 in HEERF Student Aid funding to the employee?s family member who was a student at the University but was not eligible to receive the funds. Specifically, the CARES Team selected students to receive these funds that met the following criteria: 1) Student was enrolled in the Fall of 2021 or Spring 2022, 2) student had past due balances incurred during the 2020-2021 or 2021-2022 academic years, 3) the student was in good academic standing, and 4) they were participating in a payment plan or in the College Completion Advising program. The student was not selected by the CARES Team as eligible to receive these funds. During our testing of additional 60 student disbursement transactions we found no other exceptions. Why did this problem occur? The University has not established proper segregation of duties to prevent University employees from awarding federal funding to a member of their family. Specifically, the employee had access rights within the University?s financial aid system that granted the employee the ability to both award and disburse federal funds without another employee reviewing or approving. In addition, the University did not have a written policy, as recommended by industry best practices, that prohibits employees from applying aid to family members? accounts. Why does this problem matter? Federal funds that are misapplied or used for unallowable purposes could be subject to repayment from the University to the federal granting agency. Without ensuring adequate segregation of duties within the University?s financial aid system for awarding and disbursing federal funds, the University increases the risk that fraud could occur. In the instance identified, the University recovered the funding from the student. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-062 Metropolitan State University of Denver (University) should improve its internal controls over federal Higher Education Emergency Relief Funds by instituting appropriate segregation of duties over the awarding of federal funds to students. This should include requiring that no one employee can both award then disburse aid to students and developing and implementing a formal written policy that prohibits University employees from awarding financial aid to their family members. Response Metropolitan State University Agree Implementation Date: June 2023 In January 2023, the Executive Director of Financial Aid and Scholarships implemented a code of conduct that addresses and prohibits University personnel from awarding financial aid to their family members or other persons considered conflicts of interest. The Office of Financial Aid and Scholarships will draft policy by June 30, 2023, to address the segregation of duties that prohibits awarding and disbursing federal, state, or institutional funding to students by one employee.
Finding 2022-063 Higher Education Emergency Relief Fund Reporting Compliance Finding The CARES Act was signed into law on March 27, 2020, and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the (HEERF Program. CRRSAA was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Since April 2020, the University has been awarded a total of $86.3 million in HEERF funding. From inception through June 30, 2022, the University spent $35.4 million for the HEERF program Student Aid Portion and $48.9 million for the HEERF program Institutional Portion. The University reports that it will spend the remaining amount of funding during Fiscal Year 2023. The University signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate the University?s acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The ED specified that Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The annual report is to be submitted directly to the federal ED. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University had adequate internal controls in place over and complied with HEERF Institutional and Student Aid Portion grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the University?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 5 of the 8 HEERF reports submitted by the University during Fiscal Year 2022 to determine whether the reports were posted on the University?s primary website or submitted directly to the ED by the federal due dates and complied with federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? For the Student Aid Portion, beginning on May 6, 2020, the ED required institutions to publicly post certain information on their website, including the number of awards distributed to students, the total amount awarded, and the methodologies used by the institution to determine which students receive awards, no later than 30 days after the award date, and to update that information every 45 days thereafter (by posting a new report). ? On August 31, 2020, the ED revised the reporting requirement by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. This revision from every 45 days to a calendar quarter was effective for the first calendar quarter report due by October 10, 2020, and covering the period from after the institution?s last report through the end of the calendar quarter on September 30, 2020. ? For the Institutional Portion, a federal form filled out by the institution must be posted on the institution?s website covering aggregate expenditure amounts for each calendar quarter (September 30, December 31, March 31, and June 30) and concluding after an institution has spent the institutional portion of their HEERF Funds. The institution must post their first report by October 30, 2020, the first quarter of 2021 report by July 20, 2021, and post all other reports no later than 10 days after the end of each calendar quarter (October 10, January 10, April 10, and July 10). ? Section 18004(e) of the CARES Act and Section 314(e) of the CRRSAA require an institution receiving funds under HEERF to submit a report to the Secretary of the ED at ?such time in such a manner as the Secretary may require?. ? Federal regulation [2 CFR 200.334] states that ?financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.? The instructions for the Quarterly HEERF Reporting Form notes, ?any changes or updates after the initial posting must be conspicuously noted after initial posting and the date of the change must be noted in the `Date of Report? line.? ? Federal regulation [2 CFR 200.303] states that the University, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The University signed a HEERF Certification and Agreement to accept the funding and acknowledge its responsibilities under the grant; therefore, the University was responsible under the Agreement to ensure that it complied with HEERF reporting and other requirements. What problems did the audit work identify? We determined that 2 out of 5 reports tested (40 percent) did not meet the HEERF grant report posting requirements. Specifically: ? The University did not post the HEERF CRRSAA Student quarterly report for the quarter ending September 30, 2021 on the University?s primary website, as required. ? The University published the HEERF ARP Student quarterly report for the quarter ending March 31, 2022 on May 26, 2022?46 days past the due date of April 10, 2022. No issues were noted on the accuracy of the financial information on this report. Why did these problems occur? The University did not implement adequate internal controls to ensure it complied with the HEERF grant reporting requirements. Specifically, the University did not have appropriate policies and procedures in place to ensure that staff submit the required reports within federally required timeframes. Why do these problems matter? Federal oversight agencies, including ED, depend on accurate reports to measure program results and states? compliance with federal requirements. By failing to report the HEERF spending information in accordance with federal regulations, the University failed to comply with the requirements of the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-063 Metropolitan State University of Denver (University) should strengthen its internal controls over reporting and ensure it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by developing and documenting policies and procedures for identifying and researching the specific reporting requirements and ensuring that staff post to the University?s website the required reports within federally required timeframes. In addition, the University should ensure that all the HEERF reports that are currently required to be posted are on the website. Response Metropolitan State University Agree Implementation Date: December 2022 In December 2022, the Office of Financial Aid strengthened its internal control over the reporting requirements for the Higher Education Emergency Relief Fund (HEERF), by adding the report due dates to the internal operational calendar. Additional level reviews were also added to the submission process before the required reports will be sent to the Department of Education and posted on the financial aid website.
Finding 2022-059 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF I) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund (Assistance Listing No. 84.425). The HEERF program contains two portions: the Student Aid portion (Assistance Listing No. 84.425E) and the Institutional portion, which is made up of the following: HEERF Institutional Aid Portion (Assistance Listing No. 84.425F), HEERF Minority Serving Institutions (Assistance Listing No. 84.425L), HEERF Strengthening Institutions Program (Assistance Listing No. 84.425M), Institutional Resilience and Expanded Postsecondary Opportunity (Assistance Listing No. 84.425P), and HEERF Supplemental Assistance to Institutions of Higher Education program (Assistance Listing No. 84.425S). Amounts provided to students through HEERF are considered to be ?Emergency Financial Aid Grants to Students? under the Program. Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent approximately $97.8 million for the HEERF program Student Aid portion which is used to award Emergency Financial Aid Grants to students and $113.9 million for the HEERF Institutional Portion, which is used to support the colleges. $117.3 of this amount was expended by the System during Fiscal Year 2022. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the ED to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The annual report is to be submitted directly to the ED. The ED has specified certain criteria that must be included in each report. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System had adequate internal controls in place over, and complied with, the HEERF Institutional and Student Aid grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the System?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 25 of the 117 HEERF reports submitted by the System?s campuses during Fiscal Year 2022 to determine whether the reports were posted on each campus? primary website (quarterly reports) or submitted to ED (annual reports) by the federal due dates. Furthermore, for the Student Aid Quarterly Report we requested from each Campus the underlying support for the reports, which consisted of student data detailing how much aid was awarded and the methods the campuses used to determine which students would receive Emergency Financial Aid Grants. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? On May 13, 2021, the ED published in the Federal Register a notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. The following information must appear in a format and location that is easily accessible to the public: o An acknowledgement that the institution signed and returned to the ED the Certification and Agreement and the assurance that the institution has used the applicable amount of funds designated under the CRRSAA and ARP programs to provide Emergency Financial Aid Grants to Students. o The total amount of funds that the institution will receive or has received from the ED pursuant to the institution's Certification and Agreement for Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total amount of Emergency Financial Aid Grants distributed to students under the CRRSAA and ARP programs as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). o The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total number of students who have received an Emergency Financial Aid Grant to students under the CRRSAA and ARP programs. o The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CRRSAA and ARP programs. o Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants. ? Federal Uniform Guidance [2 CFR 200.303] requires that recipients of federal awards have internal controls in place to ensure that federal reports are accurate and report complete information. Appropriate supporting documentation is evidence of such internal controls. What problems did the audit work identify? We identified issues with 5 of the 25 Fiscal Year 2022 reports we tested (20 percent). Specifically, Front Range Community College (FRCC), Pueblo Community College (PCC), and Lamar Community College (LCC) could not provide appropriate supporting documentation for one or more of the following data elements in five of the Student Aid Quarterly Reports: student data detailing (a) the total amount of Emergency Financial Aid Grants distributed to students, (b) the total number of students eligible to receive Emergency Financial Aid Grants and/or (c) the total number of students at the institution who have received an Emergency Financial Aid Grant. The specific issues we found the following: ? FRCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended September 30, 2021 as 20,684; based on our review, we determined the supported number was 20,782. ? FRCC reported the total number of students at the institution who have received an Emergency Financial Aid Grant for the quarter ended June 30, 2022 as 20,385 (student portion) and 3,207 (institutional portion); based on our review, we determined the supported numbers were 20,401 and 3,222, respectively. ? LCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended June 30, 2022 as 1,007; based on our review, we determined the supported number was 1,034. In addition, the amount disbursed directly to student emergency financial aid grants to date was reported as 961 and total for all HEERF funds was 1,124; based on our review, we determined the supported numbers were 988 and 1,151, respectively. ? PCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarters ending September 30, 2021 and December 31, 2021 as 3,191; based on our review, we determined this amount could not be supported and PCC did not provide a revised count. Why did these problems occur? FRCC, PCC, and LCC campuses did not have procedures in place to ensure that supporting documentation was maintained for its Student Aid Quarterly Reporting. Employee turnover in the FRCC Controller position and FRCC, PCC, and LCC Student Financial Aid Director positions further contributed to FRCC, PCC, and LCC?s inability to locate or recreate the supporting documentation. Why do these problems matter? It is important for FRCC, PCC, and LCC to ensure that they obtain and maintain appropriate documentation to support amounts reported to federal awarding agencies, especially when they are the basis for determining FRCC, PCC, and LCC?s compliance with specific federal program requirements. This issue could lead to inaccurate federal reporting and potential noncompliance, which could result in the federal government requiring FRCC, PCC, and LCC to return funds or a negative impact to the System?s future federal program funding. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-059 Front Range Community College, Lamar Community College, and Pueblo Community College campuses should strengthen their internal controls over federal reporting and ensure they comply with the Higher Education Emergency Relief Fund reporting requirements by reviewing reports for accuracy and developing procedures for ensuring the required maintenance of all related supporting documentation. Response Front Range Community College Agree Implementation Date: September 2022 Moving forward the Director of Financial Aid will engage the Restricted Funds Accountants in a quality assurance review of both dollars spent, type of fund, and student counts before it is submitted for final review and publishing by the Director of Resource Development and Senior Grant Administrator. The most recently submitted information for the quarterly report of September 30, 2022 will be sent to the Restricted Funds Accountants to validate that FRCC has been and will continue to be in compliance for quarterly HEERF reporting. Response Lamar Community College Agree Implementation Date: July 2022 The Financial Aid Director and the Controller will compile their reporting support on the shared drive they utilize for other routine purposes as well, to ensure clear documentation of the numbers reported. The original report containing errors was corrected, validated, and reposted. All past year?s reporting data was made available on the shared drive as of July 2022. Response Pueblo Community College Agree Implementation Date: October 2022 Each quarter Financial aid will obtain and compare Cognos and Banner disbursement reports for accuracy. Once the unduplicated student count is determined it will be sent to the Vice President of Student Success to validate and approve going forward. Financial aid will ensure staff maintain supporting documentation for any institutional expenditures information that was obtained from the fiscal office. Disbursement and expenditure data will be compiled for the Department of Education?s Quarterly Report by the submission deadline and will be submitted as PDF to webmaster for posting on PCC?s website and a copy emailed to a contact at the Department of Education and will archive the submission for future reference.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Finding 2022-064 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide emergency financial assistance to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the University under the Higher Education Emergency Relief Fund (HEERF I) Program. The federal Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the federal American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Each of the University?s campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (DOE) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements of the HEERF program there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The DOE specified that the Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The University?s campuses are required to submit the annual report directly to the DOE. During Fiscal Year 2022, each University campus was required to complete and post 8 reports (four Student Aid and four Institutional) to their website. During Fiscal Year 2022, the University?s three campuses in total expended approximately $60 million in HEERF grant funds: $27 million was expended by the Boulder campus, $10.5 million was expended by the Colorado Springs campus, and $22.5 million was expended by the Denver campus. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over and complied with the HEERF grant reporting requirements for Fiscal Year 2022. As part of our audit work, we tested the University?s campuses? internal controls over the HEERF grant reporting requirements. In addition, we tested 11 of the 12 student reports and 3 of the 12 institutional reports posted by the University during Fiscal Year 2022 to determine whether the University campuses posted the required information on each campus? website accurately, and by the federal due dates. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? The DOE issued a notice on May 13, 2021, requiring institutions to publicly post their required HEERF reports on the institution?s website as soon as possible, but no later than 30 days after the publication of the notice, or 30 days after the date the DOE first obligated funds under HEERF I, II, or III to the institution for emergency financial assistance to students; whichever comes later. The institution is required to post the report no later than 10 days after the end of each calendar quarter, after the initial posting. ? Federal regulation [2 CFR 200.303] states that the System?s campuses, as federal grant recipients, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? What problem did the audit work identify? We identified 2 out of the 14 reports tested (14.3 percent) that did not meet the HEERF grant report posting requirements. Specifically, the University of Colorado, Colorado Springs Campus, did not post the required information for the HEERF Student Aid Portion on its website for two of four quarters of Fiscal Year 2022 timely. First, the University posted the quarter-ending September 30, 2021 report to its website on December 23, 2021, or 74 days after the deadline of October 10. Second, the University did not post the quarter-ending March 31, 2022 report, which was due April 10, 2022, until October 2022, after we notified them of the error; this was approximately 6 months late. We did not identify any issues with the accuracy of the reports, and we found that the other two campuses in the University of Colorado System posted the required information on their respective websites as required by federal regulations. Why did this problem occur? The University?s Colorado Springs campus did not have adequate internal controls in place to ensure it complied with the HEERF grant reporting requirements. Specifically, the Colorado Springs Campus did not have appropriate policies and procedures in place for identifying and researching changes in HEERF reporting requirements. The federal government updated and provided a new form for HEERF reporting in September 2021 that included a section for institutional information but inadvertently excluded student information from the form. Because the form no longer required the student information, the Colorado Springs campus staff inaccurately assumed that the student information was no longer required to be reported. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in the DOE Certification and Agreement that is signed and agreed to by the University. By failing to report required information in accordance with federal regulations, the University failed to comply with the requirements of the HEERF program and potentially risks repercussions from the DOE as specified in the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-064 The University of Colorado?s Colorado Springs campus should strengthen its internal controls over and ensure that it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by establishing policies and procedures for identifying and researching changes in HEERF reporting requirements and posting reports to the campus website as required by federal regulations. Response University of Colorado Agree Implementation Date: Implemented Management agrees. After the notification of the missing HEERF report in December 2021, the UCCS Controller proposed a ?cross-check? process to ensure all future reporting is in compliance and reported in a timely manner. This process is used for both the quarterly and annual reporting process. In the quarterly reporting process, the UCCS Controller completes the institutional report and emails the report to the UCCS Financial Aid office Senior Executive Director for verification of the amounts and the data submitted. The Senior Executive Director then enters the student aid portion?s information and provides this to the UCCS Controller for verification of the data. Once verified, the report is uploaded to the UCCS website and a confirmation email is sent to the UCCS Controller as well as the heerfreporting@ed.gov for verification of completion of the website posting. This process has been duplicated with the annual reporting process. Before the annual report is submitted a review will be done to verify the report figures match the CU financials for the calendar year.
Finding 2022-062 Higher Education Emergency Relief Fund Student Aid Finding The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to higher education institutions, including the University, under the HEERF program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. Since March 11, 2021, the University has been awarded $45.6 million in HEERF grant funds through the American Rescue Plan (ARP), otherwise known as HEERF III. Of this award, the University was provided both 1) Student Aid monies, along with 2) Institutional Aid monies. Student Aid monies must be used to provide financial aid grants to students (including students exclusively enrolled in distance education), which may be used for ?any component of the student?s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, healthcare (including mental health care), or childcare. Institutional Aid monies may be used to defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll) and to make additional financial grants to students. During Fiscal Year 2022, the University spent $21.0 million for the Student Aid portion and $20.2 million for the Institutional portion of HEERF III funds. For the Student Aid portion of the HEERF III funding, the University divided the funding into different groups. The University developed a written plan (that applied during Fiscal Year 2022) for each group and a control process for awarding the monies to students. One of the groups of funding was to be awarded to students with unpaid balances in their tuition or auxiliary accounts with past due balances incurred during the 2020-2021 or 2021-2022 academic years. A team of University employees (CARES Team) was tasked with identifying those students, then contacting those students and asking if they would like the University to apply the student?s HEERF award to pay down the student?s account balance or pay it to the student directly. Once the student informed the University of their election, then the University awarded and disbursed the funds. What was the purpose of our audit work and what was performed? The purpose of the audit work was to determine whether the University was in compliance with the HEERF program regulations for awarding and paying the Student Aid portion of the HEERF funding, and whether proper controls were in place over the program during Fiscal Year 2022. Our testing included conducting interviews with management and selecting a sample of 60 disbursements made to students during Fiscal Year 2022 to test controls and compliance. We performed testing on the 60 disbursements to determine whether awards and disbursements were made in accordance with the University?s documented plan. How were the results of the audit work measured? In accordance with HEERF III requirements, the University must prioritize student aid distributions to students with exceptional needs. In addition, the University must have a documented plan to distribute funds to students. Federal regulations [2 CFR 200.303] require any non-federal grant award recipient to establish and maintain effective internal control over the federal award that provides reasonable assurance that the grant award recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Lastly, student aid application best practices discourage employees from awarding aid to family members. What problem did the audit work identify? Based on interviews with University management, the University identified that a University employee inappropriately provided $700 in HEERF Student Aid funding to the employee?s family member who was a student at the University but was not eligible to receive the funds. Specifically, the CARES Team selected students to receive these funds that met the following criteria: 1) Student was enrolled in the Fall of 2021 or Spring 2022, 2) student had past due balances incurred during the 2020-2021 or 2021-2022 academic years, 3) the student was in good academic standing, and 4) they were participating in a payment plan or in the College Completion Advising program. The student was not selected by the CARES Team as eligible to receive these funds. During our testing of additional 60 student disbursement transactions we found no other exceptions. Why did this problem occur? The University has not established proper segregation of duties to prevent University employees from awarding federal funding to a member of their family. Specifically, the employee had access rights within the University?s financial aid system that granted the employee the ability to both award and disburse federal funds without another employee reviewing or approving. In addition, the University did not have a written policy, as recommended by industry best practices, that prohibits employees from applying aid to family members? accounts. Why does this problem matter? Federal funds that are misapplied or used for unallowable purposes could be subject to repayment from the University to the federal granting agency. Without ensuring adequate segregation of duties within the University?s financial aid system for awarding and disbursing federal funds, the University increases the risk that fraud could occur. In the instance identified, the University recovered the funding from the student. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-062 Metropolitan State University of Denver (University) should improve its internal controls over federal Higher Education Emergency Relief Funds by instituting appropriate segregation of duties over the awarding of federal funds to students. This should include requiring that no one employee can both award then disburse aid to students and developing and implementing a formal written policy that prohibits University employees from awarding financial aid to their family members. Response Metropolitan State University Agree Implementation Date: June 2023 In January 2023, the Executive Director of Financial Aid and Scholarships implemented a code of conduct that addresses and prohibits University personnel from awarding financial aid to their family members or other persons considered conflicts of interest. The Office of Financial Aid and Scholarships will draft policy by June 30, 2023, to address the segregation of duties that prohibits awarding and disbursing federal, state, or institutional funding to students by one employee.
Finding 2022-063 Higher Education Emergency Relief Fund Reporting Compliance Finding The CARES Act was signed into law on March 27, 2020, and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the (HEERF Program. CRRSAA was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Since April 2020, the University has been awarded a total of $86.3 million in HEERF funding. From inception through June 30, 2022, the University spent $35.4 million for the HEERF program Student Aid Portion and $48.9 million for the HEERF program Institutional Portion. The University reports that it will spend the remaining amount of funding during Fiscal Year 2023. The University signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate the University?s acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The ED specified that Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The annual report is to be submitted directly to the federal ED. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University had adequate internal controls in place over and complied with HEERF Institutional and Student Aid Portion grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the University?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 5 of the 8 HEERF reports submitted by the University during Fiscal Year 2022 to determine whether the reports were posted on the University?s primary website or submitted directly to the ED by the federal due dates and complied with federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? For the Student Aid Portion, beginning on May 6, 2020, the ED required institutions to publicly post certain information on their website, including the number of awards distributed to students, the total amount awarded, and the methodologies used by the institution to determine which students receive awards, no later than 30 days after the award date, and to update that information every 45 days thereafter (by posting a new report). ? On August 31, 2020, the ED revised the reporting requirement by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. This revision from every 45 days to a calendar quarter was effective for the first calendar quarter report due by October 10, 2020, and covering the period from after the institution?s last report through the end of the calendar quarter on September 30, 2020. ? For the Institutional Portion, a federal form filled out by the institution must be posted on the institution?s website covering aggregate expenditure amounts for each calendar quarter (September 30, December 31, March 31, and June 30) and concluding after an institution has spent the institutional portion of their HEERF Funds. The institution must post their first report by October 30, 2020, the first quarter of 2021 report by July 20, 2021, and post all other reports no later than 10 days after the end of each calendar quarter (October 10, January 10, April 10, and July 10). ? Section 18004(e) of the CARES Act and Section 314(e) of the CRRSAA require an institution receiving funds under HEERF to submit a report to the Secretary of the ED at ?such time in such a manner as the Secretary may require?. ? Federal regulation [2 CFR 200.334] states that ?financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.? The instructions for the Quarterly HEERF Reporting Form notes, ?any changes or updates after the initial posting must be conspicuously noted after initial posting and the date of the change must be noted in the `Date of Report? line.? ? Federal regulation [2 CFR 200.303] states that the University, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The University signed a HEERF Certification and Agreement to accept the funding and acknowledge its responsibilities under the grant; therefore, the University was responsible under the Agreement to ensure that it complied with HEERF reporting and other requirements. What problems did the audit work identify? We determined that 2 out of 5 reports tested (40 percent) did not meet the HEERF grant report posting requirements. Specifically: ? The University did not post the HEERF CRRSAA Student quarterly report for the quarter ending September 30, 2021 on the University?s primary website, as required. ? The University published the HEERF ARP Student quarterly report for the quarter ending March 31, 2022 on May 26, 2022?46 days past the due date of April 10, 2022. No issues were noted on the accuracy of the financial information on this report. Why did these problems occur? The University did not implement adequate internal controls to ensure it complied with the HEERF grant reporting requirements. Specifically, the University did not have appropriate policies and procedures in place to ensure that staff submit the required reports within federally required timeframes. Why do these problems matter? Federal oversight agencies, including ED, depend on accurate reports to measure program results and states? compliance with federal requirements. By failing to report the HEERF spending information in accordance with federal regulations, the University failed to comply with the requirements of the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-063 Metropolitan State University of Denver (University) should strengthen its internal controls over reporting and ensure it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by developing and documenting policies and procedures for identifying and researching the specific reporting requirements and ensuring that staff post to the University?s website the required reports within federally required timeframes. In addition, the University should ensure that all the HEERF reports that are currently required to be posted are on the website. Response Metropolitan State University Agree Implementation Date: December 2022 In December 2022, the Office of Financial Aid strengthened its internal control over the reporting requirements for the Higher Education Emergency Relief Fund (HEERF), by adding the report due dates to the internal operational calendar. Additional level reviews were also added to the submission process before the required reports will be sent to the Department of Education and posted on the financial aid website.
Finding 2022-059 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF I) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund (Assistance Listing No. 84.425). The HEERF program contains two portions: the Student Aid portion (Assistance Listing No. 84.425E) and the Institutional portion, which is made up of the following: HEERF Institutional Aid Portion (Assistance Listing No. 84.425F), HEERF Minority Serving Institutions (Assistance Listing No. 84.425L), HEERF Strengthening Institutions Program (Assistance Listing No. 84.425M), Institutional Resilience and Expanded Postsecondary Opportunity (Assistance Listing No. 84.425P), and HEERF Supplemental Assistance to Institutions of Higher Education program (Assistance Listing No. 84.425S). Amounts provided to students through HEERF are considered to be ?Emergency Financial Aid Grants to Students? under the Program. Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent approximately $97.8 million for the HEERF program Student Aid portion which is used to award Emergency Financial Aid Grants to students and $113.9 million for the HEERF Institutional Portion, which is used to support the colleges. $117.3 of this amount was expended by the System during Fiscal Year 2022. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the ED to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The annual report is to be submitted directly to the ED. The ED has specified certain criteria that must be included in each report. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System had adequate internal controls in place over, and complied with, the HEERF Institutional and Student Aid grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the System?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 25 of the 117 HEERF reports submitted by the System?s campuses during Fiscal Year 2022 to determine whether the reports were posted on each campus? primary website (quarterly reports) or submitted to ED (annual reports) by the federal due dates. Furthermore, for the Student Aid Quarterly Report we requested from each Campus the underlying support for the reports, which consisted of student data detailing how much aid was awarded and the methods the campuses used to determine which students would receive Emergency Financial Aid Grants. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? On May 13, 2021, the ED published in the Federal Register a notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. The following information must appear in a format and location that is easily accessible to the public: o An acknowledgement that the institution signed and returned to the ED the Certification and Agreement and the assurance that the institution has used the applicable amount of funds designated under the CRRSAA and ARP programs to provide Emergency Financial Aid Grants to Students. o The total amount of funds that the institution will receive or has received from the ED pursuant to the institution's Certification and Agreement for Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total amount of Emergency Financial Aid Grants distributed to students under the CRRSAA and ARP programs as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). o The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total number of students who have received an Emergency Financial Aid Grant to students under the CRRSAA and ARP programs. o The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CRRSAA and ARP programs. o Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants. ? Federal Uniform Guidance [2 CFR 200.303] requires that recipients of federal awards have internal controls in place to ensure that federal reports are accurate and report complete information. Appropriate supporting documentation is evidence of such internal controls. What problems did the audit work identify? We identified issues with 5 of the 25 Fiscal Year 2022 reports we tested (20 percent). Specifically, Front Range Community College (FRCC), Pueblo Community College (PCC), and Lamar Community College (LCC) could not provide appropriate supporting documentation for one or more of the following data elements in five of the Student Aid Quarterly Reports: student data detailing (a) the total amount of Emergency Financial Aid Grants distributed to students, (b) the total number of students eligible to receive Emergency Financial Aid Grants and/or (c) the total number of students at the institution who have received an Emergency Financial Aid Grant. The specific issues we found the following: ? FRCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended September 30, 2021 as 20,684; based on our review, we determined the supported number was 20,782. ? FRCC reported the total number of students at the institution who have received an Emergency Financial Aid Grant for the quarter ended June 30, 2022 as 20,385 (student portion) and 3,207 (institutional portion); based on our review, we determined the supported numbers were 20,401 and 3,222, respectively. ? LCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended June 30, 2022 as 1,007; based on our review, we determined the supported number was 1,034. In addition, the amount disbursed directly to student emergency financial aid grants to date was reported as 961 and total for all HEERF funds was 1,124; based on our review, we determined the supported numbers were 988 and 1,151, respectively. ? PCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarters ending September 30, 2021 and December 31, 2021 as 3,191; based on our review, we determined this amount could not be supported and PCC did not provide a revised count. Why did these problems occur? FRCC, PCC, and LCC campuses did not have procedures in place to ensure that supporting documentation was maintained for its Student Aid Quarterly Reporting. Employee turnover in the FRCC Controller position and FRCC, PCC, and LCC Student Financial Aid Director positions further contributed to FRCC, PCC, and LCC?s inability to locate or recreate the supporting documentation. Why do these problems matter? It is important for FRCC, PCC, and LCC to ensure that they obtain and maintain appropriate documentation to support amounts reported to federal awarding agencies, especially when they are the basis for determining FRCC, PCC, and LCC?s compliance with specific federal program requirements. This issue could lead to inaccurate federal reporting and potential noncompliance, which could result in the federal government requiring FRCC, PCC, and LCC to return funds or a negative impact to the System?s future federal program funding. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-059 Front Range Community College, Lamar Community College, and Pueblo Community College campuses should strengthen their internal controls over federal reporting and ensure they comply with the Higher Education Emergency Relief Fund reporting requirements by reviewing reports for accuracy and developing procedures for ensuring the required maintenance of all related supporting documentation. Response Front Range Community College Agree Implementation Date: September 2022 Moving forward the Director of Financial Aid will engage the Restricted Funds Accountants in a quality assurance review of both dollars spent, type of fund, and student counts before it is submitted for final review and publishing by the Director of Resource Development and Senior Grant Administrator. The most recently submitted information for the quarterly report of September 30, 2022 will be sent to the Restricted Funds Accountants to validate that FRCC has been and will continue to be in compliance for quarterly HEERF reporting. Response Lamar Community College Agree Implementation Date: July 2022 The Financial Aid Director and the Controller will compile their reporting support on the shared drive they utilize for other routine purposes as well, to ensure clear documentation of the numbers reported. The original report containing errors was corrected, validated, and reposted. All past year?s reporting data was made available on the shared drive as of July 2022. Response Pueblo Community College Agree Implementation Date: October 2022 Each quarter Financial aid will obtain and compare Cognos and Banner disbursement reports for accuracy. Once the unduplicated student count is determined it will be sent to the Vice President of Student Success to validate and approve going forward. Financial aid will ensure staff maintain supporting documentation for any institutional expenditures information that was obtained from the fiscal office. Disbursement and expenditure data will be compiled for the Department of Education?s Quarterly Report by the submission deadline and will be submitted as PDF to webmaster for posting on PCC?s website and a copy emailed to a contact at the Department of Education and will archive the submission for future reference.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Finding 2022-064 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide emergency financial assistance to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the University under the Higher Education Emergency Relief Fund (HEERF I) Program. The federal Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the federal American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Each of the University?s campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (DOE) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements of the HEERF program there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The DOE specified that the Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The University?s campuses are required to submit the annual report directly to the DOE. During Fiscal Year 2022, each University campus was required to complete and post 8 reports (four Student Aid and four Institutional) to their website. During Fiscal Year 2022, the University?s three campuses in total expended approximately $60 million in HEERF grant funds: $27 million was expended by the Boulder campus, $10.5 million was expended by the Colorado Springs campus, and $22.5 million was expended by the Denver campus. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over and complied with the HEERF grant reporting requirements for Fiscal Year 2022. As part of our audit work, we tested the University?s campuses? internal controls over the HEERF grant reporting requirements. In addition, we tested 11 of the 12 student reports and 3 of the 12 institutional reports posted by the University during Fiscal Year 2022 to determine whether the University campuses posted the required information on each campus? website accurately, and by the federal due dates. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? The DOE issued a notice on May 13, 2021, requiring institutions to publicly post their required HEERF reports on the institution?s website as soon as possible, but no later than 30 days after the publication of the notice, or 30 days after the date the DOE first obligated funds under HEERF I, II, or III to the institution for emergency financial assistance to students; whichever comes later. The institution is required to post the report no later than 10 days after the end of each calendar quarter, after the initial posting. ? Federal regulation [2 CFR 200.303] states that the System?s campuses, as federal grant recipients, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? What problem did the audit work identify? We identified 2 out of the 14 reports tested (14.3 percent) that did not meet the HEERF grant report posting requirements. Specifically, the University of Colorado, Colorado Springs Campus, did not post the required information for the HEERF Student Aid Portion on its website for two of four quarters of Fiscal Year 2022 timely. First, the University posted the quarter-ending September 30, 2021 report to its website on December 23, 2021, or 74 days after the deadline of October 10. Second, the University did not post the quarter-ending March 31, 2022 report, which was due April 10, 2022, until October 2022, after we notified them of the error; this was approximately 6 months late. We did not identify any issues with the accuracy of the reports, and we found that the other two campuses in the University of Colorado System posted the required information on their respective websites as required by federal regulations. Why did this problem occur? The University?s Colorado Springs campus did not have adequate internal controls in place to ensure it complied with the HEERF grant reporting requirements. Specifically, the Colorado Springs Campus did not have appropriate policies and procedures in place for identifying and researching changes in HEERF reporting requirements. The federal government updated and provided a new form for HEERF reporting in September 2021 that included a section for institutional information but inadvertently excluded student information from the form. Because the form no longer required the student information, the Colorado Springs campus staff inaccurately assumed that the student information was no longer required to be reported. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in the DOE Certification and Agreement that is signed and agreed to by the University. By failing to report required information in accordance with federal regulations, the University failed to comply with the requirements of the HEERF program and potentially risks repercussions from the DOE as specified in the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-064 The University of Colorado?s Colorado Springs campus should strengthen its internal controls over and ensure that it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by establishing policies and procedures for identifying and researching changes in HEERF reporting requirements and posting reports to the campus website as required by federal regulations. Response University of Colorado Agree Implementation Date: Implemented Management agrees. After the notification of the missing HEERF report in December 2021, the UCCS Controller proposed a ?cross-check? process to ensure all future reporting is in compliance and reported in a timely manner. This process is used for both the quarterly and annual reporting process. In the quarterly reporting process, the UCCS Controller completes the institutional report and emails the report to the UCCS Financial Aid office Senior Executive Director for verification of the amounts and the data submitted. The Senior Executive Director then enters the student aid portion?s information and provides this to the UCCS Controller for verification of the data. Once verified, the report is uploaded to the UCCS website and a confirmation email is sent to the UCCS Controller as well as the heerfreporting@ed.gov for verification of completion of the website posting. This process has been duplicated with the annual reporting process. Before the annual report is submitted a review will be done to verify the report figures match the CU financials for the calendar year.
Finding 2022-062 Higher Education Emergency Relief Fund Student Aid Finding The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to higher education institutions, including the University, under the HEERF program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. Since March 11, 2021, the University has been awarded $45.6 million in HEERF grant funds through the American Rescue Plan (ARP), otherwise known as HEERF III. Of this award, the University was provided both 1) Student Aid monies, along with 2) Institutional Aid monies. Student Aid monies must be used to provide financial aid grants to students (including students exclusively enrolled in distance education), which may be used for ?any component of the student?s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, healthcare (including mental health care), or childcare. Institutional Aid monies may be used to defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll) and to make additional financial grants to students. During Fiscal Year 2022, the University spent $21.0 million for the Student Aid portion and $20.2 million for the Institutional portion of HEERF III funds. For the Student Aid portion of the HEERF III funding, the University divided the funding into different groups. The University developed a written plan (that applied during Fiscal Year 2022) for each group and a control process for awarding the monies to students. One of the groups of funding was to be awarded to students with unpaid balances in their tuition or auxiliary accounts with past due balances incurred during the 2020-2021 or 2021-2022 academic years. A team of University employees (CARES Team) was tasked with identifying those students, then contacting those students and asking if they would like the University to apply the student?s HEERF award to pay down the student?s account balance or pay it to the student directly. Once the student informed the University of their election, then the University awarded and disbursed the funds. What was the purpose of our audit work and what was performed? The purpose of the audit work was to determine whether the University was in compliance with the HEERF program regulations for awarding and paying the Student Aid portion of the HEERF funding, and whether proper controls were in place over the program during Fiscal Year 2022. Our testing included conducting interviews with management and selecting a sample of 60 disbursements made to students during Fiscal Year 2022 to test controls and compliance. We performed testing on the 60 disbursements to determine whether awards and disbursements were made in accordance with the University?s documented plan. How were the results of the audit work measured? In accordance with HEERF III requirements, the University must prioritize student aid distributions to students with exceptional needs. In addition, the University must have a documented plan to distribute funds to students. Federal regulations [2 CFR 200.303] require any non-federal grant award recipient to establish and maintain effective internal control over the federal award that provides reasonable assurance that the grant award recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Lastly, student aid application best practices discourage employees from awarding aid to family members. What problem did the audit work identify? Based on interviews with University management, the University identified that a University employee inappropriately provided $700 in HEERF Student Aid funding to the employee?s family member who was a student at the University but was not eligible to receive the funds. Specifically, the CARES Team selected students to receive these funds that met the following criteria: 1) Student was enrolled in the Fall of 2021 or Spring 2022, 2) student had past due balances incurred during the 2020-2021 or 2021-2022 academic years, 3) the student was in good academic standing, and 4) they were participating in a payment plan or in the College Completion Advising program. The student was not selected by the CARES Team as eligible to receive these funds. During our testing of additional 60 student disbursement transactions we found no other exceptions. Why did this problem occur? The University has not established proper segregation of duties to prevent University employees from awarding federal funding to a member of their family. Specifically, the employee had access rights within the University?s financial aid system that granted the employee the ability to both award and disburse federal funds without another employee reviewing or approving. In addition, the University did not have a written policy, as recommended by industry best practices, that prohibits employees from applying aid to family members? accounts. Why does this problem matter? Federal funds that are misapplied or used for unallowable purposes could be subject to repayment from the University to the federal granting agency. Without ensuring adequate segregation of duties within the University?s financial aid system for awarding and disbursing federal funds, the University increases the risk that fraud could occur. In the instance identified, the University recovered the funding from the student. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-062 Metropolitan State University of Denver (University) should improve its internal controls over federal Higher Education Emergency Relief Funds by instituting appropriate segregation of duties over the awarding of federal funds to students. This should include requiring that no one employee can both award then disburse aid to students and developing and implementing a formal written policy that prohibits University employees from awarding financial aid to their family members. Response Metropolitan State University Agree Implementation Date: June 2023 In January 2023, the Executive Director of Financial Aid and Scholarships implemented a code of conduct that addresses and prohibits University personnel from awarding financial aid to their family members or other persons considered conflicts of interest. The Office of Financial Aid and Scholarships will draft policy by June 30, 2023, to address the segregation of duties that prohibits awarding and disbursing federal, state, or institutional funding to students by one employee.
Finding 2022-063 Higher Education Emergency Relief Fund Reporting Compliance Finding The CARES Act was signed into law on March 27, 2020, and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the (HEERF Program. CRRSAA was signed into law on December 27, 2020 and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal COVID-19 ? Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: the Student Aid Portion [ALN 84.425E] and the Institutional Portion [ALN 84.425F]. Since April 2020, the University has been awarded a total of $86.3 million in HEERF funding. From inception through June 30, 2022, the University spent $35.4 million for the HEERF program Student Aid Portion and $48.9 million for the HEERF program Institutional Portion. The University reports that it will spend the remaining amount of funding during Fiscal Year 2023. The University signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate the University?s acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The ED specified that Student Aid Portion and Institutional Portion reports needed to be posted to an institution?s website at specified times. The annual report is to be submitted directly to the federal ED. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University had adequate internal controls in place over and complied with HEERF Institutional and Student Aid Portion grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the University?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 5 of the 8 HEERF reports submitted by the University during Fiscal Year 2022 to determine whether the reports were posted on the University?s primary website or submitted directly to the ED by the federal due dates and complied with federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? For the Student Aid Portion, beginning on May 6, 2020, the ED required institutions to publicly post certain information on their website, including the number of awards distributed to students, the total amount awarded, and the methodologies used by the institution to determine which students receive awards, no later than 30 days after the award date, and to update that information every 45 days thereafter (by posting a new report). ? On August 31, 2020, the ED revised the reporting requirement by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. This revision from every 45 days to a calendar quarter was effective for the first calendar quarter report due by October 10, 2020, and covering the period from after the institution?s last report through the end of the calendar quarter on September 30, 2020. ? For the Institutional Portion, a federal form filled out by the institution must be posted on the institution?s website covering aggregate expenditure amounts for each calendar quarter (September 30, December 31, March 31, and June 30) and concluding after an institution has spent the institutional portion of their HEERF Funds. The institution must post their first report by October 30, 2020, the first quarter of 2021 report by July 20, 2021, and post all other reports no later than 10 days after the end of each calendar quarter (October 10, January 10, April 10, and July 10). ? Section 18004(e) of the CARES Act and Section 314(e) of the CRRSAA require an institution receiving funds under HEERF to submit a report to the Secretary of the ED at ?such time in such a manner as the Secretary may require?. ? Federal regulation [2 CFR 200.334] states that ?financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.? The instructions for the Quarterly HEERF Reporting Form notes, ?any changes or updates after the initial posting must be conspicuously noted after initial posting and the date of the change must be noted in the `Date of Report? line.? ? Federal regulation [2 CFR 200.303] states that the University, as a federal grant recipient, must ?establish and maintain effective internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulation, and the terms and conditions of the Federal award.? The University signed a HEERF Certification and Agreement to accept the funding and acknowledge its responsibilities under the grant; therefore, the University was responsible under the Agreement to ensure that it complied with HEERF reporting and other requirements. What problems did the audit work identify? We determined that 2 out of 5 reports tested (40 percent) did not meet the HEERF grant report posting requirements. Specifically: ? The University did not post the HEERF CRRSAA Student quarterly report for the quarter ending September 30, 2021 on the University?s primary website, as required. ? The University published the HEERF ARP Student quarterly report for the quarter ending March 31, 2022 on May 26, 2022?46 days past the due date of April 10, 2022. No issues were noted on the accuracy of the financial information on this report. Why did these problems occur? The University did not implement adequate internal controls to ensure it complied with the HEERF grant reporting requirements. Specifically, the University did not have appropriate policies and procedures in place to ensure that staff submit the required reports within federally required timeframes. Why do these problems matter? Federal oversight agencies, including ED, depend on accurate reports to measure program results and states? compliance with federal requirements. By failing to report the HEERF spending information in accordance with federal regulations, the University failed to comply with the requirements of the Certification and Agreement. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-063 Metropolitan State University of Denver (University) should strengthen its internal controls over reporting and ensure it complies with the Higher Education Emergency Relief Fund (HEERF) reporting requirements by developing and documenting policies and procedures for identifying and researching the specific reporting requirements and ensuring that staff post to the University?s website the required reports within federally required timeframes. In addition, the University should ensure that all the HEERF reports that are currently required to be posted are on the website. Response Metropolitan State University Agree Implementation Date: December 2022 In December 2022, the Office of Financial Aid strengthened its internal control over the reporting requirements for the Higher Education Emergency Relief Fund (HEERF), by adding the report due dates to the internal operational calendar. Additional level reviews were also added to the submission process before the required reports will be sent to the Department of Education and posted on the financial aid website.
Finding 2022-059 Higher Education Emergency Relief Fund (HEERF) Reporting Compliance The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF I) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund (Assistance Listing No. 84.425). The HEERF program contains two portions: the Student Aid portion (Assistance Listing No. 84.425E) and the Institutional portion, which is made up of the following: HEERF Institutional Aid Portion (Assistance Listing No. 84.425F), HEERF Minority Serving Institutions (Assistance Listing No. 84.425L), HEERF Strengthening Institutions Program (Assistance Listing No. 84.425M), Institutional Resilience and Expanded Postsecondary Opportunity (Assistance Listing No. 84.425P), and HEERF Supplemental Assistance to Institutions of Higher Education program (Assistance Listing No. 84.425S). Amounts provided to students through HEERF are considered to be ?Emergency Financial Aid Grants to Students? under the Program. Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent approximately $97.8 million for the HEERF program Student Aid portion which is used to award Emergency Financial Aid Grants to students and $113.9 million for the HEERF Institutional Portion, which is used to support the colleges. $117.3 of this amount was expended by the System during Fiscal Year 2022. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the ED to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the HEERF program requirements, there are three components to reporting: (1) public reporting on the Student Aid Portion; (2) public reporting on the Institutional Portion, and (3) the annual report, which includes summarized information on the Student Aid and Institutional Portions for the reporting period. The annual report is to be submitted directly to the ED. The ED has specified certain criteria that must be included in each report. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System had adequate internal controls in place over, and complied with, the HEERF Institutional and Student Aid grant reporting requirements for Fiscal Year 2022. As part of our audit work, we reviewed the System?s internal controls over the HEERF grant reporting requirements. In addition, we tested a sample of 25 of the 117 HEERF reports submitted by the System?s campuses during Fiscal Year 2022 to determine whether the reports were posted on each campus? primary website (quarterly reports) or submitted to ED (annual reports) by the federal due dates. Furthermore, for the Student Aid Quarterly Report we requested from each Campus the underlying support for the reports, which consisted of student data detailing how much aid was awarded and the methods the campuses used to determine which students would receive Emergency Financial Aid Grants. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? On May 13, 2021, the ED published in the Federal Register a notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. The following information must appear in a format and location that is easily accessible to the public: o An acknowledgement that the institution signed and returned to the ED the Certification and Agreement and the assurance that the institution has used the applicable amount of funds designated under the CRRSAA and ARP programs to provide Emergency Financial Aid Grants to Students. o The total amount of funds that the institution will receive or has received from the ED pursuant to the institution's Certification and Agreement for Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total amount of Emergency Financial Aid Grants distributed to students under the CRRSAA and ARP programs as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). o The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CRRSAA and ARP programs. o The total number of students who have received an Emergency Financial Aid Grant to students under the CRRSAA and ARP programs. o The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CRRSAA and ARP programs. o Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants. ? Federal Uniform Guidance [2 CFR 200.303] requires that recipients of federal awards have internal controls in place to ensure that federal reports are accurate and report complete information. Appropriate supporting documentation is evidence of such internal controls. What problems did the audit work identify? We identified issues with 5 of the 25 Fiscal Year 2022 reports we tested (20 percent). Specifically, Front Range Community College (FRCC), Pueblo Community College (PCC), and Lamar Community College (LCC) could not provide appropriate supporting documentation for one or more of the following data elements in five of the Student Aid Quarterly Reports: student data detailing (a) the total amount of Emergency Financial Aid Grants distributed to students, (b) the total number of students eligible to receive Emergency Financial Aid Grants and/or (c) the total number of students at the institution who have received an Emergency Financial Aid Grant. The specific issues we found the following: ? FRCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended September 30, 2021 as 20,684; based on our review, we determined the supported number was 20,782. ? FRCC reported the total number of students at the institution who have received an Emergency Financial Aid Grant for the quarter ended June 30, 2022 as 20,385 (student portion) and 3,207 (institutional portion); based on our review, we determined the supported numbers were 20,401 and 3,222, respectively. ? LCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarter ended June 30, 2022 as 1,007; based on our review, we determined the supported number was 1,034. In addition, the amount disbursed directly to student emergency financial aid grants to date was reported as 961 and total for all HEERF funds was 1,124; based on our review, we determined the supported numbers were 988 and 1,151, respectively. ? PCC reported the total number of students eligible to receive Emergency Financial Aid Grants for the quarters ending September 30, 2021 and December 31, 2021 as 3,191; based on our review, we determined this amount could not be supported and PCC did not provide a revised count. Why did these problems occur? FRCC, PCC, and LCC campuses did not have procedures in place to ensure that supporting documentation was maintained for its Student Aid Quarterly Reporting. Employee turnover in the FRCC Controller position and FRCC, PCC, and LCC Student Financial Aid Director positions further contributed to FRCC, PCC, and LCC?s inability to locate or recreate the supporting documentation. Why do these problems matter? It is important for FRCC, PCC, and LCC to ensure that they obtain and maintain appropriate documentation to support amounts reported to federal awarding agencies, especially when they are the basis for determining FRCC, PCC, and LCC?s compliance with specific federal program requirements. This issue could lead to inaccurate federal reporting and potential noncompliance, which could result in the federal government requiring FRCC, PCC, and LCC to return funds or a negative impact to the System?s future federal program funding. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-059 Front Range Community College, Lamar Community College, and Pueblo Community College campuses should strengthen their internal controls over federal reporting and ensure they comply with the Higher Education Emergency Relief Fund reporting requirements by reviewing reports for accuracy and developing procedures for ensuring the required maintenance of all related supporting documentation. Response Front Range Community College Agree Implementation Date: September 2022 Moving forward the Director of Financial Aid will engage the Restricted Funds Accountants in a quality assurance review of both dollars spent, type of fund, and student counts before it is submitted for final review and publishing by the Director of Resource Development and Senior Grant Administrator. The most recently submitted information for the quarterly report of September 30, 2022 will be sent to the Restricted Funds Accountants to validate that FRCC has been and will continue to be in compliance for quarterly HEERF reporting. Response Lamar Community College Agree Implementation Date: July 2022 The Financial Aid Director and the Controller will compile their reporting support on the shared drive they utilize for other routine purposes as well, to ensure clear documentation of the numbers reported. The original report containing errors was corrected, validated, and reposted. All past year?s reporting data was made available on the shared drive as of July 2022. Response Pueblo Community College Agree Implementation Date: October 2022 Each quarter Financial aid will obtain and compare Cognos and Banner disbursement reports for accuracy. Once the unduplicated student count is determined it will be sent to the Vice President of Student Success to validate and approve going forward. Financial aid will ensure staff maintain supporting documentation for any institutional expenditures information that was obtained from the fiscal office. Disbursement and expenditure data will be compiled for the Department of Education?s Quarterly Report by the submission deadline and will be submitted as PDF to webmaster for posting on PCC?s website and a copy emailed to a contact at the Department of Education and will archive the submission for future reference.
Finding 2022-061 Internal Controls and Compliance Over Research and Development Cluster Period of Performance and Procurement The federal government sponsors Research and Development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal grantee entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award. R&D activities at the Colorado School of Mines are subject to federal period of performance and procurement requirements. Period of performance is the time in which the School may incur new obligations to carry out the work authorized by the federal award. Procurement is the process that the School follows to purchase goods and services. The School has established a process to review expenditures charged to federal awards during the federal award?s period of performance period to ensure that any costs incurred outside of the allowable timeframe are reversed out and not charged to the federal award. Per the Colorado School of Mines policies and procedures, the School pre-audits travel, equipment, personal disbursements, and participant support expenses prior to recording the transaction to ensure allowability of the expense. The School also post-audits salary, fringe benefits, tuition, and credit card expenses to ensure allowability. The School?s procurement process includes a policy that establishes levels of approval for purchase orders (PO) based on the dollar amount of the PO. Based on the dollar amount of the PO, the School will also attach the vendor contract to the PO. The School?s Controller?s Office sends the contracts with the attached PO to the assigned individual for signature and approval. During Fiscal Year 2022, the School expended approximately $65 million in federal R&D grant funds. What was the purpose of our audit work and what work was performed? The purpose of our audit work was to determine whether the School had adequate internal controls in place over, and complied with, the Procurement and Period of Performance requirements within the R&D Cluster during Fiscal Year 2022. Period of Performance. We reviewed a random sample of 40 costs that were incurred prior to or within the first month of the grant start date to determine whether the School only charged the allowable cost to a federal award during the period of performance. Procurement. We reviewed a random sample of 16 procurement transactions that were over the micro-purchase threshold of $10,000 to determine whether School staff complied with the School?s internal procurement policy. All transactions over the micro-purchase threshold are subject to the procurement policy approval thresholds. We also compared the original PO issued against the School?s procurement policy to determine if the appropriate approval was obtained. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulations [2 CFR 200.303(a)] states that a non-federal entity should establish and maintain effective internal control over Federal awards that provide reasonable assurance that non-federal entities are managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a part of maintaining internal controls, the School should maintain evidence of such controls occurring to show that the School Mines has internal controls in place as required by the Uniform Guidance and that it is evaluating and monitoring its compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. ? Federal regulations [2 CFR 200.77 and 2 CFR 200.458] state that a non-Federal entity may only charge allowable costs to a federal award during the period of performance. According to the grant agreement, pre-award costs may be charged up to 90 days prior to the start date. Therefore, the pre-award cost period for the School?s R&D grant for Federal Fiscal Year 2022 began on October 19, 2021. ? Federal regulation [2 CFR 200.318] states that the School must document procurement procedures. The Schools procurement policy provides approval limits for purchase orders. According to this policy, certain individuals can approve POs up to $500,000, and others can approve POs up to $5 million. What problems did the audit work identify? During our Fiscal Year 2022 audit, we identified exceptions with period of performance and procurement requirements for the R&D grant. Specifically, we identified the following issues: Period of Performance. We found that the School incurred expenses prior to the period of performance start date related to 2 of the 40 disbursements (5 percent) tested. Specifically, School spent $2,593 between October 1, 2021 and October 16, 2021, or 3 to 18 days before the allowable period. Procurement. We found that the School did not obtain the appropriate approval for 1 of the 16 (6 percent) transactions tested. Specifically, the individual who signed the PO for $706,660 only had authority to sign PO?s up to a threshold of $ $500,000, which was $206,660 less than the amount of the PO. Why did these problems occur? The School did not have adequate internal controls over period of performance and procurement requirements for its R&D grant during Fiscal Year 2022. Specifically: Period of Performance. The School?s reviewer misunderstood the period of performance requirements related to the transaction and related federal award. Specifically, according to the School, the reviewer confused the period of performance start date of October 19, 2021 with the payroll period of October 1, 2021 through October 15, 2021, which was prior to the period of performance start date and resulted in the expenditures erroneously being charged to the grant. Procurement. We found that there was inconsistency with the Schools internal process and its published procurement policy regarding the approval process for POs. Specifically, the verbally approved internal process allowed the individual we noted as an exception to approve POs up to $2.5 million; however, this had not been updated in the published procurement policy. Why do these problems matter? By charging expenditures to federal awards outside of the period of performance, the School is not complying with the requirements of the federal awards. In addition, by not obtaining documented evidence of approval from the appropriate individuals, the School is not complying with its internal procurement procedures. This could result in procuring a service or product for an unreasonable amount and there is an increased risk of fictitious or fraudulent POs if the charge does not align with the Schools mission. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-061 The Colorado School of Mines should strengthen its internal controls over and ensure it complies with period of performance and procurement requirements for its Research and Development (R&D) grants by: A. Instituting an appropriate review of expenditures to ensure they are within the period of performance for the federal award, and ensuring that staff have an appropriate understanding of the related period of performance requirements or obtain clarification from the federal grantor, as appropriate. B. Updating its published procurement policy to ensure it contains the current approval process and thresholds. Response Colorado School of Mines A. Agree Implementation Date: July 1, 2022 Colorado School of Mines will ensure appropriate reviews of expenditures occur to ensure they are within the period of performance for the federal award, and ensure that staff have an appropriate understanding of the related period of performance requirements or obtain clarification from the federal grantor, as appropriate. B. Agree Implementation Date: June 30, 2023 Mines did not update published Procurement Policies specific to approval limits by position to accurately reflect the delegated approval authority. Mines will update the published policies to accurately reflect delegated approval limits and review the procurement approval process.