Finding Text
2022-007 ? Higher Education Emergency Relief Funds Earmarking Requirements Finding Type. Material Noncompliance/Material Weakness in Internal Control over Compliance (Earmarking/Allowable Costs/Cost Principles). Program. COVID-19 - Higher Education Emergency Relief Fund; Assistance Listing Numbers 84.425E, 84.425F. Criteria. The University is required to use Higher Education Emergency Relief Funds (HEERF) in accordance with the applicable law under which the funds were appropriated. At least 50% of HEERF I funds, appropriated under the Coronavirus Aid, Relief, and Economic Security Act (CARES), must be reserved to provide students with emergency financial aid grants. Under HEERF II, appropriated under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), the University must provide at least the same amount of funding in financial aid grants to students as was required under its student aid portion of HEERF I. HEERF III, appropriated under the American Rescue Plan, requires a portion of funds must be used to implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conduct direct outreach to financial aid applicants about the opportunity to receive a financial aid adjustment due to the recent unemployment of a family member or independent student. The student portion of HEERF awards must be used to provide students with emergency financial aid grants. Condition. The University had excess funds after disbursing to students from the student portion of HEERF III emergency financial aid grants. Management discharged outstanding student balances using the excess student portion of HEERF III. Management advised students the funds could be applied to outstanding balances; however, students were not given the option to receive a cash payment in lieu of being applied to outstanding balances. Management also did not maintain detail records tracking how HEERF funds were spent across HEERF I, HEERF II, and HEERF III. Cause. This condition appears to have been caused by management lacking the appropriate knowledge and understanding of the grant requirements. Additionally, there was not appropriate oversight of accounting personnel involved in the grant management to ensure the appropriate level of detailed recordkeeping was being performed. Effect. As a result of this condition, the student portion of HEERF III was used for a purpose other than to provide emergency financial aid grants to students. The University partially discharged the existing student balance of 31 students amounting to $88,958. The University did not spend the required cumulative minimum of the student portion on allowable costs. Questioned Costs. $88,958 in questioned costs have been identified. Recommendation. We recommend management and accounting personnel with involvement in federal funding attend grant specific trainings and that the University maintain detailed records to allow the proper tracking of federal expenditures on a grant level basis. View of Responsible Officials. Management agrees with the finding. See corrective action plan.