Finding Text
Finding 2022-003: Education Stabilization Fund Cash Management Federal Agency: Department of Education Program: COVID-19 Education Stabilization Fund: 84.425 Criteria: In accordance with the Higher Education Emergency Relief Fund cash management requirements found in the 2 CFR Part 200, institutional aid is required to be disbursed within three calendar days of the drawdown from Department of Education grants management system (G5). In addition, the obligation for lost revenue is considered to have occurred on the date that the institution completes its estimate of its amount of lost revenue after the estimation period. Condition: The internal control system to ensure that this program was fully in compliance with all cash management requirements was not operating effectively. An error occurred in WCCC?s calculation of lost revenue due to incorrectly applying the amount of lost revenue relating to fiscal year 2022 to the drawdown in March of 2022. As the obligation for lost revenue occurs after the estimation period ends, lost revenue for fiscal year 2022 should not have been drawn down until after year end and resulted in an overdraw of institutional aid of approximately $410,000 in March. The overdrawn amount was eligible to be part of the lost revenue drawn for 2022 and therefore no refund of the funds is required. WCCC did not subsequently spend this funding within three days as required. In addition, various invoice amounts totaling approximately $75,000 were also incorrectly applied toward this funding as institutional expenses and a 10% administrative cost on those invoices and on WCCC?s estimated amount of lost revenue was incorrectly applied toward this fund in the amount of approximately $382,000. Again, these amounts could have been corrected with the August 2022 draw for eligible fiscal year 2022 expenditures so no return of funds required. The overall impact of these errors was a cash management issue of drawing the funds too early. Cause: Procedures in place to ensure that funds were drawn in the proper period were not adequate. Effect: WCCC was not in compliance with all cash management requirements. The total institutional expenses included on the Schedule of Expenditures of Federal Awards is shown net of these errors and the overdraw was properly spent in fiscal year 2023. Questioned costs: None Recommendation: We recommend that WCCC implement procedures to ensure funds are drawn correctly and appropriately spent within three days of the draw. View of Responsible Officials and Planned Corrective Action: A reconciliation of all stabilization funds has taken place and will continue to take place until all funds are drawn down. A checks and balances procedure is in place to ensure calculations are accurate and reports reflect actual activity.