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2022-002: Higher Education Emergency Relief Fund ? Institutional Portion ? Earmarking Federal Program: Education Stabilization Fund; COVID-19 ? Higher Education Emergency Relief Fund ? Institutional Portion Assistance Listing Number: 84.425F Federal Agency: U.S. Department of Education Pass-Through Entity: None Federal Award Identification Number: P425F204862 Repeat Finding: This is not a repeat finding Criteria ?The Higher Education Emergency Relief Fund (HEERF) III Frequently Asked Questions (FAQs) outlined that the American Rescue Plan (ARP) added two new required uses of HEERF III institutional portion grant funds for public and private nonprofit institutions. Namely, a portion of their institutional funds must: (a) Implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines; and (b) Conduct direct outreach to financial aid applicants about the opportunity to receive a financial aid adjustment due to the recent unemployment of a family member or independent student, or other circumstances, described in section 479A of the Higher Education Act. Condition and context ? The Academy used the institutional portion of HEERF III funds to offset lost revenue, which is allowed, but did not document amounts to be earmarked or used, if any, for the criteria outlined above. FAQ 28, as per below, prescribes that the amount to be earmarked or used for such activities is discretionary: Congress did not prescribe any specific practices, strategies, or methods that institutions must use to implement this required activity, and institutions have flexibility to carry out activities tailored to their unique needs and circumstances that are evidence-based and in accordance with public health guidelines. Congress also did not set a specific threshold or amount of an institution?s ARP (a)(1) Institutional Portion funds that must be used to implement this provision. Cause ? Management was not aware of the additional criteria, as it was only part of an FAQ release. Possible Asserted Effect ? The Academy may need to reallocate a portion of the grant funds used to demonstrate that they were used in accordance with the criteria above. Questioned Costs - None. Recommendations ? We recommend that management document how they addressed the aforementioned required criteria and follow-up with the Department of Education to ascertain whether their documentation is satisfactory and if any grant money will require reallocation. Management?s Views and Corrective Action Plan ? Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the Summary Schedule of Prior Audit Findings.