Finding Text
Finding 2022-002: Earmarking (Significant Deficiency) U.S. Department of Education COVID-19 Education Stabilization Fund 84.425E, 84.425F Compliance requirement: Earmarking Criteria: The American Rescue Plan created two new requirements that a portion of HEERF III institutional funds must be used (a) to 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 recent unemployment of a family member or independent student, or other circumstances described in section 479A of the Higher Education Act. Institutions must document how the amount of the HEERF grant spent on these two required activities was reasonable and necessary given the unique needs and circumstances of the institution. Condition and Context: During our audit procedures we noted that the entire Institutional amount awarded under ARP HEERF III was used to discharge student debt. The organization failed to earmark a portion of the award toward the two required uses. Cause: These findings appear to be due to a deficiency in internal controls. Effect or Potential Effect: The institute was not in compliance with federal regulations regarding earmarking for the year ended September 30, 2022. Questioned costs: $0 Identification of repeat finding: No. Recommendation: We recommend that the Institute add additional procedures and implement controls to ensure that they are complying with earmarking requirements. View of Responsible Officials: We agree with both the finding and the recommendation. Procedures have been implemented to ensure that a portion of HEERF III institutional funds are used to implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines for the remaining ARP HEERF III award balance and that proper documentation of the funds used is maintained. The following should be noted: a) Approximately 85% of AAMI?s students attend only the school?s on- line program and no mitigation by AAMI for these students was required. b) AAMI moved into its new space which includes its classrooms in November 2020 after the start of the Coronavirus Epidemic. A review of the new space ventilation equipment, which was state of the art equipment, was performed and the ventilation system was determined to be very good and needed no enhancing. c) AAMI consistently purchased masks for students, staff and visitors. Efforts were increased to support a clean and sanitary campus through the purchase of hand sanitizer. Our office expenses increased over $100,000 from 2021 to 2022, not all of which was due to COVID-19 prevention; however, the increase in our cleaning expense which is part of that demonstrates our commitment to consistent cleaning and disinfection. d) Campus class sizes were monitored closely during the pandemic. Although AAMI did not have to alter class sizes due to standard enrollment, AAMI did require classroom occupancy to be reduced so social distancing protocols could be followed. e) Fortunately, all AAMI staff members were vaccinated prior to HEERF III; however, all staff members were urged to work remotely if they had any respiratory illness symptoms. We also provided students with the opportunity to obtain excused absences if respiratory illness treatment could be documented by a doctor. Instructors were advised to use remote learning tools for students who were unable to attend campus due to illness. Additionally, a direct outreach to financial aid applicants about the opportunity to receive financial aid adjustment due to recent unemployment of a family member or being an independent student will be performed.