Finding Text
Assistance listing program: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425F Award identification number: P425F204999 Award period: September 29, 2020 to June 30, 2023 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control / Compliance Finding Type: Material Weakness Compliance requirement: Earmarking Condition and context We inquired the Institution?s management on the amount of institutional funds assigned to: (a) implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines; and (b) 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, or other circumstances, described in section 479A of the HEA, and how the Institution documented how the amount of the HEERF grant spent on these two required activities was reasonable and necessary given the unique needs and circumstances of the institution. However, this information was not available for our examination. Criteria The Higher Education Emergency Relief Fund III frequently asked questions published on May 11, 2021 and updated on May 24, 2021 and October 25, 2022 in questions number 21, 28 and 35, respectively, establish that the ARP has added two new required uses of HEERF III institutional portion grant funds for public and private nonprofit institutions. Namely, a portion of their institutional funds must: (a) implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines; and (b) 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, or other circumstances, described in section 479A of the HEA. This provision of ARP requires institutions to use some of their ARP (a)(1) Institutional Portion funds to help fight the spread and transmission of COVID-19 on their campuses and among their student, faculty, and staff community members. This provision also applies to future ARP awards the Department will make under (a)(2) and (a)(3). It is critical that institutions take steps to prevent and mitigate the spread of coronavirus on their campuses and local communities. Institutions should document how they implemented these two required activities consistent with 2 CFR ? 200.334. Specifically, institutions should document (1) the strategies used to monitor and suppress COVID-19, (2) the evidence to support those strategies, (3) how those strategies were in accordance with public health guidelines, (4) the manner and extent of the direct outreach the institution conducted to financial aid applicants, and (5) how the amount of the HEERF grant spent on these two required activities was reasonable and necessary given the unique needs and circumstances of the institution. 2 CFR 200.303 (a) to (d) establish that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. 2 CFR 200.334 establishes that financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Cause The Institution?s management was not familiar with this requirement. Effect Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. It could also be interpreted as a failure to manage federal awards in compliance with laws, regulations, and provisions of contracts and grant agreements. Questioned costs Unable to determine. Identification as a Repeat Finding No repeated finding. Recommendation We recommend that the Institution management review this compliance requirement and verify if the Institution assigned and expended funds related to these activities. It is important that the Institution management ascertain that expenditures identified comply with the characteristics and requirements as explained in the Higher Education Emergency Relief Fund III frequently asked questions published on May 11, 2021, as subsequently updated. Also, the Institution must document and maintain an audit trail of the transactions incurred to comply with this requirement. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.