Finding 10295 (2023-001)

Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund Assistance Listing Numbers: 84.425F – Higher Education Emergency Relief Fund (HEERF) Institutional Portion Federal Award Identification Number and Year: P425F201713 and P425F201723 Award Period: July 1, 2022, to June 30, 2023 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Significant Deficiency in Internal Controls over Compliance. Criteria or Specific Requirement: In addition to the basic cash management principles, for Coronavirus Relief and Response Supplemental Appropriation (CRRSAA), HEERF II and the American Rescue Plan Act (ARP), HEERF III, the Certification, agreements and/or supplemental agreements require that the student aid portion (ALN 84.425E) should be disbursed within 15 calendar days of the drawdown from Education Department’s (ED) G5 grants system and Institutional Aid Portion, (a)(2), and (a)(3) funds (all other ALNs) should be disbursed within 3 calendar days of the drawdown from G5. For lost revenue, the “obligation” occurs on the date the institution completes its estimate of its amount of lost revenue after the estimation period. Condition: During fiscal year ended June 30, 2023, approximately $5,840,000 of the ARP institutional portion was disbursed more than 3 days after the G5 cash draw receipt. Questioned Costs: None noted. Context: During our testing, we noted that the University was not in compliance with the ARP Cash Management requirements. Cause: The University had drawn down their remaining HEERF allotment near the end of FY22, as it was expected that each campus had spent their allotment. The Aiken and Salkehatchie campuses did not identify allowable costs before year end. The funding was held at USC until April 2023 when it was expended, which results in non-compliance with cash management regulations. Effect: The University pulled down funds from G5 and did not disburse them within the required days of disbursement and therefore did not comply with the requirements. Repeat Finding: No. Recommendation: We recommend that the University continuously enhance its monitoring control over administration and disbursement of HEERF money, in order to ascertain complete and accurate compliance with cash management principles and requirements. We also recommend that the University determines if any interest earned on these funds before expenditure should be returned to ED. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. Management has addressed their corrective action plan in a separately issued letter.