Finding Text
FINDING: 2023-001 Earmarking
Federal Agency / Federal Program: U.S. Department of Education / Education Stabilization Fund
Subject: Earmarking (G)
ALN Number: 84.425
Questioned Costs: $ 1,218,645
Type of Finding: Material Noncompliance, Material Weakness Internal Control
Perspective Information:
Repeat finding: No
Criteria
Institutions must use no less than 50 percent of funds received under Section 18004(a)(1) of the CARES Act to provide emergency financial aid grants to students for expenses related to the disruption of campus operations due to Coronavirus. Under ARP, the amount of funds that a public and private nonprofit institution must devote to financial aid grants to students is the full amount allocated under the Student Aid (84.425E) subprogram of HEERF III. The HEERF III grants allocated to the School were designated at 50% for the students and 50% for the School.
Condition
The School did not draw down and distribute any HEERF III student funds to its students under HEERF III as of June 30, 2023. However, it expended all the HEERF III institutional funds in 2022.
Cause
Management was led to believe by its third-party servicer that the funds had been correctly expensed
Effect
The School expended $1,218,645 of institutional funds without drawing down and expending any student funds.
Recommendation
The School has contacted DOE to request the HEERF III students funds in order to distribute the funds to its student. If the School is unable to receive those funds, we recommend that the School should contact DOE to resolve the potential liability.
Views of Responsible Officials
The School has contacted DOE to request the HEERF III students funds in order to distribute the funds to its student. If the School is unable to receive those funds, we will contact DOE to resolve the potential liability.