Finding Text
Finding No.: 2012-015
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: Allowable Costs/Cost Principles
Questioned Costs: $109,757
Criteria: Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented.
Conditions:
1. For nine (or 82%) of eleven items, aggregating $33,038 of $619,494 in total payroll expenditures, deficiencies were noted, as follows:
For item #s 1 through 2, and item #s 4 through 9, we noted discrepancy in the number of credits paid which is based on employment contract against the number of equivalent credits assigned to instructors per Semester Section Offering or Instructor’s Schedule.
Moreover, for item # 1, the employee was paid total amount of $2,275 that pertains to two separate contracts ($1,300 and $975), however, there was no approved additional contract or revision to the initial contract to substantiate the payment relating to $975.
For item #s 3 and 7, there was no approved employment contract on file.
No questioned costs are reported at this finding as questioned costs are reported at finding # 2021-014.
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 10 and 11 were not supported by adequate documentation (i.e. vendor invoices and receiving reports) to ascertain whether such expenditures were allowable costs of the underlying grants.
Cause: The College lacks adequate internal controls over compliance with applicable federal regulations relating to allowable costs/cost principles, specifically, obtaining and retaining sufficient documentation to support all transactions.
Effect: The College is in noncompliance with applicable allowable costs/cost principles requirements. The total questioned cost is $138,920, of which $29,163 is reported at finding # 2021-014.
Recommendation: College management should improve internal control policies and strengthen controls requiring obtaining and retaining sufficient documentation to support all transactions.
Views of Auditee and Corrective Action Plan: The College partially agrees with the finding and provides details in its Corrective Action Plan.