Finding Text
Finding 2022-005 - Significant Deficiency Federal Award No. 84.425F U.S. Department Of Education Higher Education Emergency Relief Fund ? Cash Management Criteria: The U.S. Department of Education (ED) communicated updated cash management guidance for the HEERF through the release of the HEERF II FAQs on January 14, 2021. The HEERF II FAQ #17 specified that grantees are under an obligation to minimize the time between drawing down funds from G5 and paying obligations incurred by the grantee. ED considered institutions compliant if they paid from the HEERF funds emergency grants to students within 15 days of the draw down and for all other uses within 3 days. The Uniform Guidance requires the identification and documentation of costs as federal expenditures to occur prior to or within the timeframe established for paying obligations when grantees must follow enhanced cash management requirements. Condition/Context: The College drew down approximately $840,000 of HEERF funds from the institutional portion in April 2022 to various costs allowed for the by HEERF institutional portion; however, the College had not identified or documented specific costs or lost revenues that would be applied at the time of the drawdown for approximately $48,000 of the costs requested. Subsequent to the 3-day requirement for obligating institutional portion funds, the College identified and documented the specific costs that occurred prior to the date of the drawdown that were to be applied against this draw. Therefore, the College did not have an adequate control in place at the time of the drawdown to ensure that costs would be allowable; however, subsequently the College was able to identify sufficient allowable costs had been incurred. Effect: The College could have drawn down funds for ineligible costs or with improper timing if sufficient allowable costs had not been identified that occurred prior to or within 3 days of the drawdown date. If the Department of Education identifies an institution as having an elevated risk or are suspected of improperly administering their HEERF grant funds, the Department has a range of possible enforcement actions which could include heightened or more frequent reporting, monitoring, or auditing of an institution and placing the HEERF grants on ?Route Payment Status?, which requires prior authorization from the Department to draw down any remaining funds. As of the audit report date, the College has not received any notifications of any enforcement actions taken against the College related to the HEERF program. Questioned Costs: There were no questioned costs identified as management was able to identify sufficient allowable costs. Cause: The College made an error in the calculation of its initial drawdown request which resulted in the additional approximately $48,000 being requested that had not yet been supported by allowable costs prior to the date of the drawdown or within 3 days after the date of the drawdown. Indication Of Repeat Finding: This is a repeat of a finding in the immediately prior year; see Summary Schedule of Prior Audit Findings 2021-006. Recommendation: We recommend that the College implement controls and processes to ensure that all expenses are properly identified and documented before any drawdowns are made. Views Of Responsible Officials (Unaudited): The College concurs with the finding and has provided corrective action through identification of specific costs incurred prior to drawdown of funds and additional review of the drawdown calculations. Completion Date: July 2022 Contact Person: Krista Harris, Chief Financial Officer