FAC Explorer

Finding 39339 (2022-001)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2022-12-12
Audit: 47973
Organization: North Central Michigan College (MI)
Auditor: Rehmann Robson LLC

AI Summary

  • Core Issue: HEERF grant funds were improperly used for executive salaries and benefits, which is against compliance rules.
  • Impacted Requirements: The Compliance Supplement clearly states that grant funds cannot cover executive compensation.
  • Recommended Follow-Up: The College should establish procedures to ensure all grant expenditures are compliant with allowable costs.

Finding Text

2022-001 - Grant Funds Used for Executive Salaries and Benefits Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Allowable Costs/Cost Principles). Program. COVID-19 - Higher Education Emergency Relief Fund - Institutions of Higher Education - Institutional ("HEERF"), Assistance Listing Number 84.425F, Award Number P425F204485. COVID-19 - HEERF - Institutions of Higher Education - Student Aid, Assistance Listing Number 84.425E, Award Number P425E201660. COVID-19 - HEERF - Institutions of Higher Education - Strengthening Institutions Programs, Assistance Listing Number 84.425M, Award Number P425M200871. Criteria. The Compliance Supplement states that a College cannot use HEERF grant funds for executive salaries and benefits. Condition. HEERF grant funds were used for a portion of five executives' salaries and benefits. Cause. The College was unaware that grant funds could not be used for executive salaries and benefits. Effect. As a result of this condition, the College used HEERF grant funds for unallowable costs. Questioned Costs. Questioned costs totaled $34,007 as a result of this finding. Recommendation. We recommend that the College implement procedures to ensure grant funds are only used on allowable costs. View of Responsible Officials. Management was unaware that the grant funds could not be used for executive salaries and benefit, and has prepared a Corrective Action Plan.

Corrective Action Plan

CORRECTIVE ACTION PLAN The compliance audit identified one finding, which is described in the Schedule of Findings and Questioned Costs. We evaluated this matter as described below and have described our corrective action as a result. 2022-001 ? Grant Funds Used for Executive Salaries and Benefits Planned Corrective Action. Finding 2022-001 was a result of College management not being aware that the HEERF grant funds could not be used for executives? salaries and benefits. As a result, the College will verify all future expenditures meeting applicable guidelines prior to using the grant funds. The College will additionally ensure that the questioned costs are repaid to the federal government or not draw down $34,007 of questioned costs when obtaining future funds. Responsible Party. Tom Zeidel, Vice President of Finance & Facilities Date of Planned Corrective Action. Effective immediately ? December 2, 2022 Management Assessment. We concur with the audit assessment regarding this matter.

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 39340 2022-001
    Significant Deficiency
  • 39341 2022-001
    Significant Deficiency
  • 615781 2022-001
    Significant Deficiency
  • 615782 2022-001
    Significant Deficiency
  • 615783 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.063 Federal Pell Grant Program $1.62M
84.268 Federal Direct Student Loans $564,689
84.425 Education Stabilization Fund $85,725
84.007 Federal Supplemental Educational Opportunity Grants $64,035
84.033 Federal Work-Study Program $34,224
45.164 Promotion of the Humanities_public Programs $14,510
84.048 Career and Technical Education -- Basic Grants to States $9,200