Finding 48241 (2022-001)

Finding No. 2022-001 Education Stabilization Fund: U.S. Department of Education: COVID-19 ? Higher Education Emergency Relief Fund ? Student Aid Portion, Assistance Listing 84.425E (award number P425E201772) COVID-19 ? Higher Education Emergency Relief Fund ? Institutional Aid Portion, Assistance Listing 84.425F (award number P425F204328) Statistically valid sample: No and it was not intended to be. Repeat finding: This is a repeat finding from the prior year single audit report (finding no. 2021-001). Compliance Requirement ? Reporting ? Significant Deficiency and Noncompliance Criteria Quarterly Public Reporting for (a)(1) Institutional Portion, (a)(2), and (a)(3) funds (Assistance Listings 84.425F, 84.425J, 84.425K, 84.425L, 84.425M, 84.425N, 84.425S, 84.425T as applicable) The CARES, CRRSAA, and ARP institutional quarterly portion reporting requirements involve publicly posting completed forms on the institution?s website. The forms must be conspicuously posted on the institution?s primary website on the same page the reports of the IHE?s activities as to the emergency financial aid grants to students (Student Aid Portion) are posted. Auditors should determine if an institution was both timely and accurate in publicly posting its Quarterly Reporting Form from October 30, 2020, onward and sample these quarterly public reports and reconcile the publicly reported amounts with underlying documentation to ensure accuracy. ED understands that this information may be unique and challenging to audit, particularly because auditors are asked to verify information posted on a webpage which may not be accessible during audit fieldwork. For these public reporting requirements, auditors may accept as evidence of compliance, contemporarily produced emails, webmaster logs, or other relevant documentation establishing a good-faith indication that the institution posted the required information at approximately the timelines established by the public reporting requirements (HEERF Grant Program Auditing Requirements, General Requirements and Information ? All HEERF Grantees). Quarterly Public Reporting for (a)(1) Student Aid Portion (Assistance Listings 84.425E) For CARES, beginning on May 6, 2020, ED required institutions that received a HEERF I Section 18004(a)(1) Student Aid Portion award to publicly post certain information on their website no later than 30 days after award, and update that information every 45 days thereafter (by posting a new report). This was announced through an electronic announcement (EA). On August 31, 2020, ED revised the EA by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. Grantees posting a 45-day report on or after August 31, 2020, should instead post a report every calendar quarter, with the first calendar quarter report due by October 10, 2020, and covering the period from after their last 45-day or 30-day report through the end of the calendar quarter on September 30, 2020. On May 13, 2021, ED published an additional notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Key Line Items ? The following are identified as critical information for the Quarterly Public Reporting for Student Aid Portion: 1. Item #3: The total amount of Emergency Financial Aid Grants distributed to students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). 2. Item #4: The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. 3. Item #5: The total number of students who have received an Emergency Financial Aid Grant to students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. 4. Item #6: The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. Further, the non-Federal entity must establish and maintain an effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award (2 CFR 200.303). Condition and Context During the year ended June 30, 2022, the University submitted 3 reports for Higher Education Emergency Relief Fund (HEERF) III related to the Institutional Aid Portion and 3 reports for the Student Aid Portion. The Manager of Financial Planning, Budgeting & Analysis and Assistant Vice President for Financial Aid and Undergraduate Admissions prepared each Institutional Aid and Student Aid report, respectively, utilizing the disbursement detail as well as other available support from the University?s information systems. The reports were then shared with management, who reviewed them and approved them via email, which was retained to show management?s authorization to post the reports. For the Institutional Aid report posted for the quarter ended December 31, 2021, the University inaccurately included lost revenue associated with fiscal year 2021, which would not have been allowable under the HEERF requirements. While the University was able to provide contractual services that were incurred in fiscal year 2022 to support the amounts expended, the report was not accurately prepared since ultimately the funds were not used to cover lost revenue. In addition, for the Student Aid report for the quarter ended December 31, 2021, we noted that the University did not include the method used to determine which students received a grant and the amount of such grant (key line item #6). Cause Management?s review is not at the precision level necessary to ensure that the Institutional Aid report was accurately prepared or that the key line items related to the Student Aid report are included in the report. Effect The University may submit reports that are incomplete or inaccurate. Questioned Costs There were no questioned costs identified as the University had eligible contractual service costs incurred (Institutional Aid report) and the key line item identified as missing does not have a monetary impact on the program (Student Aid report). Recommendation The University should strengthen its policies and practices to ensure that management?s review is precise enough to ensure that reports are complete and accurate. Views of Responsible Official Management agrees with the recommendation. The University will ensure that each report submission that is required to support spending under each of the Higher Education Emergency Relief Funds and other related funding programs has formal supporting documentation to evidence appropriate review of the report. This issue of how eligible students were determined and how the amounts distributed were determined was identified on the Q4 2021 Report due to the timing of the test work in the prior year Single Audit. This issue was corrected in the Q1 2022 Report and all available funding has been spent. The Assistant Vice President for Financial Aid has ensured that the total number of students eligible to receive a grant and the total number of students who receive grants is properly reviewed and documented. The Manager of Financial Planning, Budgeting and Analysis will ensure that all submitted Institutional Aid Reports are properly reconciled to actual expenditures rather than anticipated expenditures. The Q4 2021 Report was revised and reposted to reflect that expenditures were related to other costs rather than lost revenue. Each Student Aid Report and Institutional Aid Report will be reviewed and approved by the Associate Vice President for Finance. This review and approval will be documented in the file. The submitted Reports will also be provided to the CFO, Vice President for Finance and Treasurer.