Finding Text
2022-004 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition: In our sample of reports selected for testing, we noted the following items; a) No support could be provided to substantiate a secondary level of review was completed for student and institutional portion quarterly reports for the quarters ended 12/31/2021 and 3/31/2022 and the year two annual report. b) Student portion quarterly reports ending 12/31/2021 and 3/31/2022 reported cumulative expenditures incurred from the inception of the federal program rather than expenditures incurred within the quarter, resulting in an error of $105,202 in the first report and $165,154 in the second report. Cause: There was a lapse in oversight of the internal control process ensuring expenditures reported were accurate and reconciled to supporting documentation. The College failed to identify the change in reporting requirements between HEERF awards. Effect: The College?s controls did not detect or correct the errors identified, which resulted in inaccurate expenditures reported within HEERF quarterly reports. Additionally, not having a formal oversight process over reporting results in a reasonable possibility that reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported. Context/Sampling: Four out of eight quarterly reports were reviewed along with one annual report. Repeat Finding from Prior Year: Yes, prior year finding 2021-003. Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above and ensure documentation is retained supporting a secondary level of review is completed prior to submission of required reports. Views of Responsible Officials: Management is in agreement with the finding.