Finding 35801 (2022-004)

Significant Deficiency
Requirement
A
Questioned Costs
$1
Year
2022
Accepted
2023-03-19
Audit: 32231
Organization: Hudson Valley Community College (NY)
Auditor: Uhy LLP

AI Summary

  • Core Issue: The College over-distributed funds to 871 students due to data input errors, violating the pre-determined distribution plan.
  • Impacted Requirements: Institutions must ensure costs are allowable and report expenditures accurately, which was not met in the February and April 2022 distributions.
  • Recommended Follow-Up: Implement stronger review controls to prevent and verify accurate fund distributions in line with the published plan.

Finding Text

CFDA Number: 84.425E Education Stabilization Fund (COVID 19 ? Higher Education Emergency Relief Fund ? Student Relief) Criteria: Institutions must demonstrate that costs incurred are allowable under the relevant statutory provisions and consistent with the purpose of the Education Stabilization Fund (ESF). Institutions must also post quarterly reports timely and accurately as it relates to expenditures under the HEERF III (a)(1) Student Aid Portion. Condition: For the February and April 2022 distributions to students (related to the Spring 2022 semester), the total amount distributed exceeded the planned amount for distribution and the allocation to the eligible students did not follow the pre-determined plan which was posted publicly to the College?s website. Cause: For the February and April 2022 distributions to students, there were data input errors in assigning the dollar amount to be distributed to each student based on their EFC category. This caused a change in the amount to be distributed per student from the original pre-determined plan. Effect: The effect of the condition was an over-award to 871 students (868 of the 2,894 students in the February 2022 distribution and 3 of the 56 students in the April 2022 distribution) in the amount of $135,436 outside of the pre-determined plan which was publicly posted to the College?s website. The amount of the February and April 2022 distributions per student were not supported by the College?s plan for distribution and did not align with the plan posted publicly to the College?s website. Questioned Costs: $135,436. This was computed as the amount of the February and April 2022 distributions that were over the planned disbursement amount due to the data input error. Prevalence: The data input error was isolated to the February and April 2022 distributions. Reports by student of the previous distributions for the Fall 2021 semester and the subsequent distributions for the Fall 2022 semester were reviewed and a comparison was performed of the actual distribution per student to the planned distribution. No other instances of similar errors were identified. Recommendation: The College should enhance their review procedures. The College should have a preventative review control in place to ensure distributions are input into the system correctly and in line with the intended plan before distributing the funds to the students. The College should also have a detective control in place to review the distribution after to verify it is distributed as intended by a person separate from the one processing the distribution.

Corrective Action Plan

Financial Statements Management?s Response and Planned Corrective Action: The February 2022 and April 2022 distributions were the only distributions impacted by the data input error and both related to the Spring 2022 semester. Due to the error, 871 students (868 of the 2,894 students in the February 2022 distribution and 3 of the 56 students in the April 2022 distribution) received a higher distribution than was originally planned. Of the 871 students, 129 received $70 more than originally planned and 742 received $170 more than originally planned. In no event did any one student receive less than the originally planned distribution amount, and furthermore no student who received the additional funding was ineligible under the program. However, as the $135,436 that was distributed above the planned amount was not properly supported by the College?s plan for distribution due to an error, the College agrees that these monies should not be federally funded. After the error was identified in fiscal year 2023, the College decided to fund the over-awarded amount with the College?s own funds so that the federal distribution is in line with their pre-determined plan that has been publicly posted to the College?s website. After the correction, the College has available $135,436 of HEERF student funding that was already drawn down from the federal government. The College has a plan in place to distribute these monies to students in fiscal year 2023 to remain in compliance with the program. The College will correct the quarterly reporting to reflect the above changes. The College has also put in place review controls around the HEERF distribution process. No other instances of errors have occurred subsequent to the April 2022 distribution and, after the $135,436 is distributed to students in fiscal year 2023, all awarded amounts for student relief funding will have been appropriately expended through distributions to students per the program. Corrective Action Plan Pages Finding Number: 2022-004 Federal Assistance Listing Number: 84.425E Education Stabilization Fund (COVID 19 ? Higher Education Emergency Relief Fund ? Student Relief) Year Ended: August 31, 2022 Responsible Individual: Christine Lasch Comptroller Management?s Response and Corrective Action Plan: The College agrees with the finding and recommendation. For the February and April 2022 distributions to students, there were data input errors in assigning the dollar amount to be distributed to each student based on their EFC category. This caused a change in the amount to be distributed per student from the original pre-determined plan. The February 2022 and April 2022 distributions were the only distributions impacted by the data input error and both related to the Spring 2022 semester. Due to the error, 871 students (868 of the 2,894 students in the February 2022 distribution and 3 of the 56 students in the April 2022 distribution) received a higher distribution than was originally planned. Of the 871 students, 129 received $70 more than originally planned and 742 received $170 more than originally planned. In no event did any one student receive less than the originally planned distribution amount, and furthermore no student who received the additional funding was ineligible under the program. However, as the $135,436 that was distributed above the planned amount was not properly supported by the College?s plan for distribution due to an error, the College agrees that these monies should not be federally funded. After the error was identified in fiscal year 2023, the College decided to fund the over-awarded amount with the College?s own funds so that the federal distribution is in line with their pre-determined plan that has been publicly posted to the College?s website. After the correction, the College has available $135,436 of HEERF student funding that was already drawn down from the federal government. The College has a plan in place to distribute these monies to students in fiscal year 2023 to remain in compliance with the program. The College will correct the quarterly reporting to reflect the above changes. The College has also put in place review controls around the HEERF distribution process. No other instances of errors have occurred subsequent to the April 2022 distribution and, after the $135,436 is distributed to students in fiscal year 2023, all awarded amounts for student relief funding will have been appropriately expended through distributions to students per the program. The above procedures have already been implemented.

Categories

Questioned Costs Allowable Costs / Cost Principles Special Tests & Provisions

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.063 Federal Pell Grant Program $10.54M
84.268 Federal Direct Student Loans $10.03M
84.425 Covid-19 - Education Stabilization Fund $1.30M
84.048 Career and Technical Education -- Basic Grants to States $533,260
84.007 Federal Supplemental Educational Opportunity Grants $316,490
84.033 Federal Work-Study Program $131,312
64.027 Post-9/11 Veterans Educational Assistance $116,975
17.285 Apprenticeship USA Grants $88,528
84.126 Rehabilitation Services_vocational Rehabilitation Grants to States $54,878
47.076 Education and Human Resources $5,066
17.268 H-1b Job Training Grants $458