Federal Audit Clearinghouse RE: Prairie State College Corrective Action Plan Fiscal Year Ended June 30, 2022 Finding 2022-001 ? Controls Over Preparation of the Schedule of Expenditures of Federal Awards Criteria Uniform Guidance (2CFR?200) dictates that management is responsible for identifying and reporting federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA) for all federal grants received. Condition The initial SEFA provided by the College omitted $67,225 of Higher Education Emergency Relief Funds. Planned Corrective Action The College continues to invest in hiring qualified compliance and accounting staff members. A new Manager of Accounting Services has been hired and the grant accountant position has been posted and candidates are being reviewed. The College will continue to focus on compliance and accurate reporting for all grants and processes, establishing best practices for the institution. Contact person (s) responsible for corrective action: Cheri Taylor-Lawton, Controller and Director of Business Services Anticipated completion date: December 31, 2023 Finding 2022-002 ? Financial Reporting Criteria Financial reporting is the responsibility of management and includes the preparation of footnote disclosures, financial statement preparation, and overall maintenance of the general ledger. The inability of an organization to demonstrate proficiency in financial reporting is considered to be a control deficiency that would be considered to be a material weakness. Condition While the College demonstrated its responsibility for preparing financial statements and footnote disclosures, the following errors/control weaknesses were noted: ? Approximately $4.4 million of capital expenditures incurred from 2019 through 2021 for which restricted cash was to have been utilized was not transferred from restricted to unrestricted accounts until 2022. ? The initial lease schedules that we received appeared to have been rolled over from the prior year and did not reflect the implementation of Governmental Accounting Standards Board (?GASB?) Statement No. 87 ? Leases. However, the College was able to ultimately implement the standard. ? An audit adjustment was needed to increase the personal property replacement tax revenue and receivable by $120,369. ? Net investment in capital assets reported on the draft statement of net position was understated and unrestricted net position overstated by $4.8 million of unspent bond proceeds held in the Community Development Board escrow accounts. ? On the Uniform Financial Statements, $3.6 million of the Higher Education Emergency Relief Fund grant that was used for revenue replacement was misclassified. Planned Corrective Action As noted above, the College is investing in hiring qualified financial staff members to fill current, vacant positions. The finance team will continue to exercise diligence in this area by allowing added time for the review process. Contact person responsible for corrective action: Cheri Taylor-Lawton, Controller and Director of Business Services Anticipated completion date: December 31, 2023 Finding 2022-003 ? Inadequate Controls Over and Compliance with Reporting Requirements Assistance Listing: 84.425 Program Title: Education Stabilization Fund Subprograms: Higher Education Emergency Relief Fund (?HEERF?) Governor?s Emergency Education Relief (?GEER) Federal Agency: Department of Education Criteria There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; (2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. The CARES, CRRSAA, and ARP institutional quarterly portion reporting requirements involve publicly posting completed forms on the institution?s website. The forms must be conspicuously posted on the institution?s primary website on the same page the reports of the IHE?s activities as to the emergency financial aid grants to students (Student Aid Portion) are posted. The GEER grant agreement requires quarterly reporting of expenditures to be submitted no later than 30 calendar days following the three-month period covered by the report. Condition The HEERF Q2 2022 Institutional Portion report was not posted to the College?s website by the due date of July 10, 2022. The report was posted only after the College was informed by the auditors that it had not been posted. In addition, when comparing the College?s drawdowns and expenditures to the amount reported on the Q2 2022 Student Aid Portion report, a $2,437,286 variance, with drawdowns exceeding the amount reported on the quarterly report, was noted. The drawdowns were accurate with the report amount in error. Quarterly reporting for GEER was submitted late as follows: quarter ending 9/30/21 submitted 100 days late, quarter ending 12/31/21 submitted 101 days late, quarter ending 3/31/22 not submitted. No expenditures were incurred and no report was submitted for the quarter ending 6/30/22. For GEER II, no expenditures were reported for the quarters ending 9/30/21 and 12/31/21 and one report was submitted for both quarters on 2/18/22. In addition, $6,219.49 was reported as expended on the GEER?s 3/31/22 quarterly report and in the general ledger but the amount was never requested for reimbursement. Finally, total expenditures on the two GEER II quarterly reports were $12,069.44 less than total expenditures per the general ledger detail and the schedule of expenditures of federal awards but was ?trued up? in the next reporting period according to College staff. Planned Corrective Action The College did not have a single, dedicated grant manager for CARES funding allocations as with other institutional grants. Since receiving the initial allocation, the continued personnel challenges have plagued the financial team. Corrective action will be taken at the institution to implement best practices, ensuring processes are identified and appropriate training and backup are in place to avoid future errors. Contact person responsible for corrective action: Cheri Taylor-Lawton, Controller and Director of Business Services Anticipated completion date: December 31, 2023 Dr. Judy Mitchell, Interim Chief Financial Officer