Finding Text
INTERNAL CONTROL AND COMPLIANCE WITH THE HIGHER EDUCATION EMERGENCY RELIEF
FUND AND PROCEDURES SHOULD BE IMPROVED
HIGHER EDUCATION EMERGENCY RELIEF FUND
CFDA # 84.425E, 84.425F, 84.425L AND 84.425N
(Questioned Costs-Undetermined)
(Repeat) Condition:
During the year 2021, the University was awarded Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
of approximately $978,035 under the Higher Education Emergency Relief Fund Student Aid Portion, the Higher
Education Emergency Relief Fund Institutional Portion and the Higher Education Emergency Relief Fund Minority
Serving Institutions. Collectively, the HEERF awards (or program) which was a major federal program for the year ended
June 30, 2021. The internal controls over the compliance and administration of the new program requires management
of the University to comply with all direct and material compliance requirements outlined in the federal Compliance
Supplement Addendum for 2021 for the HEERF program. While the University established a plan to distribute funds
students in accordance with the CARES Act and to cover qualified expenditures for the Institution portion, it fail to
properly maintain detailed records of the actual distributions to each student so that a reconciliation of the distributed
funds could be reconciled to the subsidiary accounts in the general ledger. In addition the University fail to properly
maintain its documentation of the loss revenue calculation as require by the CARES Act or the Institution’s portion. The
University also fail to provide complete evidence of the quarterly and annual reporting as required by the Section
18004(a)(1) and 18004 ( c) of the CARES Act.
Context:
Review of the University’s controls and compliance requirements for activities allowed and unallowable and allowable
costs/cost principles and the reporting requirements for quarterly reporting for the quarters ending September 30, 2021
December 31, 2021 and March 31, 2022 and June 30, 2022. We selected all students Martin University determined to
be eligible for the HEERF student portion disbursement and only 51 were verified as actually receiving the disbursement.
Criteria:
The University must comply with the CARES Act Sections 18004(a)(1) Institutional Portion, (a)(2) and (a)(3) Quarterly
Public Reporting for all applicable CFDAs under 84.425E, 84.425F, 84.425L and 84.425N.
Effect:
The University may not be able to adequately document its compliance with the requirements of the CARES Act for the
HEERF program administered.
Cause:
The University did not established a system of internal control over compliance due to timing of the award and the impact the pandemic had on the training of management and staff. A complete understanding of the HEERF program requirements were not completely understood to properly complete the system of internal control and compliance documentation in a timely manner and in all material respects. Recommendation:
The University must complete its internal control and compliance policies and procedures over the HEERF program and complete the accounting and reconciliation requirements as set forth by federal regulations of the HEERF program. Specifically, activities allowed and unallowable and allowable costs/costs principles. In addition to completing the quarterly reports as required by federal regulations. If the Department of Education has established the annual reporting portal, the University should also complete that reporting requirement in connection with the reconciliations of the annual report with the quarterly reports for 2020 and 2021.
Views of Responsible Officials and Planned Corrective Actions:
The University has implemented a policy that requires a complete review of the internal controls over the compliance of the HEERF programs and to make sure that all required areas of compliance supplement are achieved. The updated policy was provided to the Grants Risk Management Services Division of DOE on 12/14/2023.