Finding Text
Education Stabilization Fund, Higher Education Emergency Relief Fund (HEERF) - Institutional Portion #84.425F U.S. Department of Education Award Year 2022 Criteria or Specific Requirement - Allowable Costs. According to 2 CFR Section 200.407 reasonable direct administrative costs and indirect costs at an institution's approved negotiated indirect cost rate may be charged against Assistance Listing 84.425F (Institutional portion). Condition - The College improperly charged an indirect cost to the federal grant for an ineligible expense that was ineligible based on the Indirect Cost Rate Agreement. The College has an approved Indirect Cost rate of 49.90 percent. Under the rate agreement, the College is approved to charge an indirect cost fee based on modified total direct costs. Modified total direct costs include direct salaries and wages, applicable fringe benefits, material and supplies, services, travel and up to the first $25,000 of each subaward. Modified total direct costs shall exclude equipment and capital expenditures if they have a useful life greater than one year and a per-unit acquisition costs which equal or exceeds $5,000. Questioned Costs - Grant Award Number: P425F201877 - 20B. Error resulted in questioned costs of $34,291 awarded to the College. Context - Out of a population of 114 institutional expenses totaling $598,317, we selected 18 institutional expenses for $416,864 to test and trace back to supporting documentation to support the charge to the federal award. For one of 18 institutional expenses selected for testing, the entire balance of the $34,291 was not considered an allowable costs since the expenditure was an indirect fee charge based on a capital expenditure. The sample was not, and was not intended to be, a statistically valid sample. Effect - The College was not in compliance with the allowable costs of the Education Stabilization Fund program. Cause - Management made an error in interpreting the indirect cost agreement associated with the equipment and capital expenditure for one of the items selected for testing. Identification as a Repeat Finding - No. Recommendation - We recommend that management review this area and establish procedures to ensure all requirements are met. View of Responsible Official and Planned Corrective Actions ? In including the questioned indirect cost as a HEERF expense, management only considered the per unit cost threshold, rather than both the per unit cost and the expected life of the items. The audit clarified the regulations and Donnelly promptly notified our program officer, posted a corrected quarterly report and refunded the funds to the Department of Education.