Finding 586727 (2023-003)

Material Weakness
Requirement
C
Questioned Costs
$1
Year
2023
Accepted
2024-01-26

AI Summary

  • Core Issue: The Center improperly drew down $69,999 from the HEERF grant before being eligible, leading to compliance issues with grant reporting.
  • Impacted Requirements: The Center failed to maintain accurate tracking of grant revenues and expenditures, affecting timely and correct financial reporting, including the SEFA.
  • Recommended Follow-Up: Implement a formal tracking system for grant activities, ensuring all reports and reimbursement requests are reviewed and reconciled before submission.

Finding Text

Criteria: The tracking and matching of grant revenues and expenditures and the related grant receivable and unearned revenue amounts is necessary to assist in making management decisions and for the proper reporting and use of such funds in accordance with each of the individual grant requirements and this information is essential for grant administration and for preparing the Center's Schedule of Expenditures of Federal Awards (SEFA). Condition/Context: The Higher Education Emergency Relief Fund (HEERF) Institutional Portion grant was funded under the reimbursement method where costs for which reimbursement was requested are to be eligible to be reimbursed for or paid for prior to the date of the reimbursement request. During the year, the Center drew down $69,999 prior to being eligible to be reimbursed for these costs. One of the two draws tested did not comply with requirements. Effect: The Center has worked with the U.S. Department of Education for purposes of determining whether the $69,999 should be returned and was instructed that it should not be returned, but that the quarterly and annual reporting that included these costs were incorrectly filed and should be revised. The Center also did not prepare a complete and accurate SEFA in a timely manner to comply with its financial reporting requirements. Cause: The Center has not prioritized a formal system for tracking its grant activities and also lacked a complete and accurate understanding of grant funding under the reimbursement method. Questioned Costs: $69,999 Recommendation: We recommend that the Center develop and implement a formal system for tracking its grant related activities including the review and approval of grant reports and draw down requests reconcile to the general ledger grant activity or eligible costs prior to submitting a reimbursement request or grant report. Views of Responsible Officials and Planned Corrective Actions: Management agrees, and is working to realign the grant process from formalizing the administration and determining the involvement of staff members. A timeline will be initiated between all involved staff to oversee, track, report and manage all of the Center's grant awards. Timeline will ensure that budgets, reporting requirements and purchases are handled in a timely manner. Management is also revising the quarter ending September 30, 2022 report and the 2022 annual report and working with the U.S. Department of Education regarding the resolution of this matter. See Corrective Action Plan.

Categories

Questioned Costs Reporting Cash Management

Other Findings in this Audit

  • 10285 2023-003
    Material Weakness
  • 10286 2023-004
    Material Weakness Repeat
  • 586728 2023-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $174,566
84.048 Career and Technical Education -- Basic Grants to States $140,654
17.258 Wia Adult Program $132,970
84.063 Federal Pell Grant Program $131,013
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $54,466
84.425 Education Stabilization Fund $31,322