Finding Text
Finding No.: 2021-014
Federal Agency: U.S. Department of Education
AL Program: 84.425 Education Stabilization Fund
AL Sub-Program: 84.425E Higher Education Emergency Relief Fund (HEERF) - Student Aid Portion
Federal Award No.: COVID-19 P425E204126
AL Sub-Program: 84.425F HEERF - Institutional Portion
Federal Award No.: COVID-19 P425F202732
AL Sub-Program: 84.425L HEERF - Minority Serving Institution
Federal Award No.: COVID-19 P425L200219
Area: Activities Allowed or Unallowed
Questioned Costs: $45,752
Criteria: In accordance with applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant statutory provisions and consistent with the purpose of the ESF “to prevent, prepare for, and respond to coronavirus”. Allowable expenditures incurred and liquidated prior to December 27, 2020 must have been “to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus”. Further, beginning December 27, 2020, any unused HEERF I Institutional Portion funds, new HEERF II Institutional Portion funds and HEERF III Institutional Portion Funds, 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).
Conditions:
1. For eleven (or 100%) of eleven items, aggregating $33,038 of $619,494 in total payroll expenditures, deficiencies were noted, as follows:
The above salaries and wages were standard recurring costs and not an additional cost to the College. Specifically, for item #s 1 through 4, they are not directly associated with significant changes to the delivery of instructions due to the coronavirus (i.e. online teaching or expansion). Moreover, for item #s 5 through 11, they are not associated with coronavirus. Furthermore, there is no evidence of communication or consultation with the grantor agency that above expenditures are allowable.
2. For two (or 7%) of twenty-nine items, aggregating $1,716,073 of $2,490,000 in total non-payroll expenditures, deficiencies were noted, as follows:
Item #s 12 and 13 are not associated with coronavirus. Specifically, expenditure relates to purchase of drone cameras and related accessories for the College’s graduation media operation. There is no evidence of communication or consultation with the grantor agency that above expenditures are allowable.
Cause: The College lacks adequate internal controls over compliance with applicable activities allowed or unallowed requirements.
Effect: The College is in noncompliance with applicable activities allowed or unallowed requirements. The total questioned cost is $45,752.
Identified as a Repeat Finding: 2020-009
Recommendation: College management should improve internal control policies and strengthen controls and procedures over compliance with applicable federal regulations on activities allowed or unallowed.
Views of Auditee and Corrective Action Plan: The College partially agrees with the finding and provides details in its Corrective Action Plan.