Finding 391939 (2023-003)

Grantor(s): American Rescue Plan Act (ARPA) Program: American Rescue Plan Act 2 of 2022 Assistance Listing#: 21.027 Title: Coronavirus State and Local Fiscal Recovery Funds Award Year: 7/2022 – 6/2023 Award #: N/A Pass-through Number: 4100086662 Criteria The funds received under Act 2 of 2022 are American Rescue Plan Act funds and are specifically for staff recruitment and retention payments. Recipients do not need to wait until they receive the payments to make payments to qualified staff, but they must spend the funds within the required timeframes. Act 2 of 2022 requires recipients to spend retention payments within 90 calendar days and recruitment payments within 180 calendar days of receipt of the funds. Additionally, hospitals and behavioral health providers may not use the money to pay more than one retention or recruitment payment to qualified staff with Act 2 of 2022 funding. Condition The University received the payments from Act 2 of 2022 on April 20, 2022, and therefore had 90 days to spend the retention payments. Of the $15,674,844 of retention payments spent by the University, 26 payments totaling $25,836 were spent after the performance period ended (7/19/2022). Additionally, the University reported more than one retention payment to 34 qualified staff members amounting to $31,530. Cause The cause of this finding is due to insufficient review of the details of retention payments paid with funds received from this program, specifically as it relates to the required 90-day window to make retention payments and the restriction on the quantity of payments to an individual with funds from this program. Effect Retention payments were spent after the performance period's end, and employees received more than one payment, which resulted in the dollar value of federal expenditures reported in the SEFA being overstated by $57,365. Questioned Costs None. Recommendation If the University receives further funding from this program, management should ensure that any future payments from this program are made within the specified timeline and with the appropriate frequency per the program’s requirements. Additionally, management should contact the Pennsylvania Department of Human Services to determine if any required corrective action related to the error of $58,442. Management’s View and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included in this report.