FAC Explorer

Finding 1170318 (2024-018)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
-
Year
2024
Accepted
2026-01-22
Audit: 383421
Organization: Kentucky State University (KY)
Auditor: CLIFTONLARSONALLEN LLP

AI Summary

  • Core Issue: The University drew down HEERF funds before actual expenditures, violating federal cash management regulations.
  • Impacted Requirements: Compliance with 2 CFR §200.305, which mandates that funds must be drawn based on immediate cash needs to avoid excess cash accumulation.
  • Recommended Follow-up: Revise cash management procedures to align drawdowns with actual needs and implement monitoring controls to ensure compliance.

Finding Text

2024 – 018 – HEERF Cash Management Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR §200.305 – Federal Payment: Requires that payment methods minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Advance payments must be limited to the minimum amounts needed and timed to meet actual, immediate cash requirements for program costs. HEERF Program Guidance: Institutions must not draw down funds in excess of immediate needs and should avoid accumulating excess cash on hand. Interest earned on excess cash over $250 per year must be remitted to the federal government. Condition: The University drew down Higher Education Emergency Relief Fund (HEERF) funds before incurring the related program expenditures. Federal regulations require that these drawdowns align with actual, immediate cash requirements to prevent excess federal cash on hand. Holding funds for extended periods before spending them can result in noncompliance. Questioned costs: None Context: During our testing of cash receipts, it was noted that the University was drawing down funds prior to incurring the related program expenditures. Cause: The University’s cash management process did not adequately align drawdown timing with actual disbursement needs. The drawdown was initiated based on anticipated expenses rather than immediate cash requirements. Effect: Drawing down funds prior to incurring expenditure creates risk of noncompliance with federal cash management regulations and may result in interest liability for excess cash held. Repeat Finding: No Recommendation: The University should revise its cash management procedures to ensure that HEERF drawdowns are based on actual, immediate cash needs rather than anticipated expenditures. Draw requests should be timed as closely as administratively feasible to the disbursement of funds for allowable program costs. Additionally, management should implement monitoring controls to prevent excess cash accumulation and ensure compliance with 2 CFR §200.305 and HEERF guidance. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing No.: 84.425 Recommendation: The University should revise its cash management procedures to ensure that HEERF drawdowns are based on actual, immediate cash needs rather than anticipated expenditures. Draw requests should be timed as closely as administratively feasible to the disbursement of funds for allowable program costs. Additionally, management should implement monitoring controls to prevent excess cash accumulation and ensure compliance with 2 CFR 200.305 and HEERF guidance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University finished issuing student disbursements on 7/8/24. This expended all remaining HEERF monies. This account has ended and has been closed out. Name(s) of the contact person(s) responsible for corrective action: Dorothy Daley, Director of Sponsored Projects Planned completion date for corrective action plan: Complete

Categories

Cash Management

Other Findings in this Audit

  • 1170284 2024-006
    Material Weakness Repeat
  • 1170285 2024-006
    Material Weakness Repeat
  • 1170286 2024-006
    Material Weakness Repeat
  • 1170287 2024-006
    Material Weakness Repeat
  • 1170288 2024-006
    Material Weakness Repeat
  • 1170289 2024-006
    Material Weakness Repeat
  • 1170290 2024-007
    Material Weakness Repeat
  • 1170291 2024-007
    Material Weakness Repeat
  • 1170292 2024-007
    Material Weakness Repeat
  • 1170293 2024-007
    Material Weakness Repeat
  • 1170294 2024-008
    Material Weakness Repeat
  • 1170295 2024-009
    Material Weakness Repeat
  • 1170296 2024-010
    Material Weakness Repeat
  • 1170297 2024-010
    Material Weakness Repeat
  • 1170298 2024-010
    Material Weakness Repeat
  • 1170299 2024-010
    Material Weakness Repeat
  • 1170300 2024-011
    Material Weakness Repeat
  • 1170301 2024-011
    Material Weakness Repeat
  • 1170302 2024-011
    Material Weakness Repeat
  • 1170303 2024-011
    Material Weakness Repeat
  • 1170304 2024-011
    Material Weakness Repeat
  • 1170305 2024-011
    Material Weakness Repeat
  • 1170306 2024-012
    Material Weakness Repeat
  • 1170307 2024-012
    Material Weakness Repeat
  • 1170308 2024-012
    Material Weakness Repeat
  • 1170309 2024-012
    Material Weakness Repeat
  • 1170310 2024-013
    Material Weakness Repeat
  • 1170311 2024-013
    Material Weakness Repeat
  • 1170312 2024-014
    Material Weakness Repeat
  • 1170313 2024-015
    Material Weakness Repeat
  • 1170314 2024-016
    Material Weakness Repeat
  • 1170315 2024-017
    Material Weakness Repeat
  • 1170316 2024-017
    Material Weakness Repeat
  • 1170317 2024-018
    Material Weakness Repeat
  • 1170319 2024-019
    Material Weakness Repeat
  • 1170320 2024-019
    Material Weakness Repeat
  • 1170321 2024-019
    Material Weakness Repeat
  • 1170322 2024-019
    Material Weakness Repeat
  • 1170323 2024-019
    Material Weakness Repeat
  • 1170324 2024-019
    Material Weakness Repeat
  • 1170325 2024-019
    Material Weakness Repeat
  • 1170326 2024-019
    Material Weakness Repeat
  • 1170327 2024-019
    Material Weakness Repeat
  • 1170328 2024-019
    Material Weakness Repeat
  • 1170329 2024-019
    Material Weakness Repeat
  • 1170330 2024-019
    Material Weakness Repeat
  • 1170331 2024-020
    Material Weakness Repeat
  • 1170332 2024-020
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $10.18M
84.063 FEDERAL PELL GRANT PROGRAM $5.38M
10.205 PAYMENTS TO 1890 LAND-GRANT COLLEGES AND TUSKEGEE UNIVERSITY $4.79M
84.425 EDUCATION STABILIZATION FUND $2.70M
10.524 SCHOLARSHIPS FOR STUDENTS AT 1890 INSTITUTIONS $1.51M
10.512 EXTENSION SERVICES AT 1890 COLLEGES AND TUSKEGEE UNIVERSITY, WEST VIRGINIA STATE COLLEGE, AND CENTRAL STATE UNIVERSITY $823,316
84.382 STRENGTHENING MINORITY-SERVING INSTITUTIONS $388,732
84.038 FEDERAL PERKINS LOAN PROGRAM_FEDERAL CAPITAL CONTRIBUTIONS $342,661
84.031 HIGHER EDUCATION INSTITUTIONAL AID $248,774
16.726 JUVENILE MENTORING PROGRAM $219,372
10.216 1890 INSTITUTION CAPACITY BUILDING GRANTS $171,463
10.229 EXTENSION COLLABORATIVE ON IMMUNIZATION TEACHING & ENGAGEMENT $154,867
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $144,896
10.443 OUTREACH AND ASSISTANCE FOR SOCIALLY DISADVANTAGED AND VETERAN FARMERS AND RANCHERS $139,844
84.033 FEDERAL WORK-STUDY PROGRAM $130,545
10.937 PARTNERSHIPS FOR CLIMATE-SMART COMMODITIES $118,066
10.237 FROM LEARNING TO LEADING: CULTIVATING THE NEXT GENERATION OF DIVERSE FOOD AND AGRICULTURE PROFESSIONALS $105,772
10.175 FARMERS MARKET AND LOCAL FOOD PROMOTION PROGRAM $82,888
84.042 TRIO STUDENT SUPPORT SERVICES $60,354
10.025 PLANT AND ANIMAL DISEASE, PEST CONTROL, AND ANIMAL CARE $54,210
10.523 CENTERS OF EXCELLENCE AT 1890 INSTITUTIONS $42,989
10.147 OUTREACH EDUCATION AND TECHNICAL ASSISTANCE $42,846
81.089 FOSSIL ENERGY RESEARCH AND DEVELOPMENT $41,056
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $40,044
10.310 AGRICULTURE AND FOOD RESEARCH INITIATIVE (AFRI) $29,109
10.500 COOPERATIVE EXTENSION SERVICE $29,066
12.905 CYBERSECURITY CORE CURRICULUM $28,257
93.859 BIOMEDICAL RESEARCH AND RESEARCH TRAINING $21,929
10.215 SUSTAINABLE AGRICULTURE RESEARCH AND EDUCATION $19,354
10.311 BEGINNING FARMER AND RANCHER DEVELOPMENT PROGRAM $16,617
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $14,668
10.001 AGRICULTURAL RESEARCH BASIC AND APPLIED RESEARCH $10,949
10.514 EXPANDED FOOD AND NUTRITION EDUCATION PROGRAM $6,295
10.515 RENEWABLE RESOURCES EXTENSION ACT $5,335
84.047 TRIO UPWARD BOUND $3,232
93.969 PPHF GERIATRIC EDUCATION CENTERS $2,198
10.226 SECONDARY EDUCATION, TWO-YEAR POSTSECONDARY EDUCATION, AND AGRICULTURE IN THE K-12 CLASSROOM $1,251
47.083 INTEGRATIVE ACTIVITIES $-1,218
10.202 COOPERATIVE FORESTRY RESEARCH $-3,540