Finding Text
2022-006. FINDING Lack of Adherence to Controls and Noncompliance with Requirement Applicable to the Education Stabilization Fund Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.425E; 84.425F; 84.425L Program Names: Higher Education Stabilization Fund - COVID-19 - Higher Education Emergency Relief Fund - Student Aid Portion COVID-19 - Higher Education Emergency Relief Fund - Institutional Portion COVID-19 - Higher Education Emergency Relief Fund - Minority Serving Institutions Program Expenditures: $4,008,386; $3,338,668; $436,450 Award Numbers: 425E201661; P425F201393; P425L200359 Questioned Costs: None The Chicago State University (University) did not utilize the updated quarterly reporting form to report its Higher Education Emergency Relief Fund (HEERF) student and institutional aid awards. During testing, we noted one of four (25%) quarterly reporting forms utilized for reporting HEERF awards was outdated. As such, the information reported by the University did not include certain data required by the Department of Education. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted into Public Law 116-136. Section 18004(a)(1) of the CARES Act established the HEERF I program which authorizes the Secretary of Education (Secretary) to allocate funding to eligible institutions of higher education to prevent, prepare for, and respond to the coronavirus pandemic (COVID-19). Subsequently, additional grants from the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) and the American Rescue Plan Act of 2021 (ARP) were received, establishing the HEERF II and HEERF III programs, respectively, to continuously support public and non-profit institutions and students. Under the CARES, CRRSSA, and ARP Acts, an institution is required to complete and post on its website a quarterly and annual report of its HEERF grant expenditures using the form designed by the Department of Education to help ensure funding transparency and public accountability. 2022-006. FINDING Lack of Adherence to Controls and Noncompliance with Requirement Applicable to the Education Stabilization Fund (Continued) The Higher Education Emergency Relief Fund III Frequently Asked Questions, Question 36, published by the Department of Education, requires the University to utilize the new quarterly reporting form beginning June 30, 2022, reporting period. The new quarterly reporting form includes new reporting categories on mental health spending, HEERF (a)(2) construction flexibilities, and lost revenue and combines the separate institutional and student reporting requirement. The Code of Federal Regulations (Code) (2 CFR ? 200.303) requires the University to establish and maintain effective internal control over the federal award to provide reasonable assurance the University is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. This finding was first reported in Fiscal Year 2020. In subsequent years, the University has been unsuccessful in implementing appropriate procedures to improve its controls over HEERF awards. University management indicated the failure to use the correct reporting form was due to lack of coordination between staff involved in the reporting process. Failure to comply with the grant reporting requirements of the HEERF programs results in noncompliance with the CARES, CRRSAA, and ARP Acts, grant agreements, and the Code. (Finding Code No. 2022-006, 2021-004, 2020-005) RECOMMENDATION We recommend the University strengthen its controls to ensure updated forms are used to report its HEERF student and institutional aid awards. UNIVERSITY RESPONSE The University agrees with the finding and has implemented a corrective action plan to improve internal controls related to posting of HEERF reports and submission of the Governor's Emergency Education Relief Fund reports.