Finding Text
Finding 2022-03 - Cash Management ALN: 84.425E COVID-19 - Higher Education Emergency Relief Fund (HEERF) - Student Portion Award Year: July 1, 2021 - June 30, 2022 Federal Agency: U.S. Department of Education Pass Through Entity: Not applicable Criteria: The U.S. Department of Education (ED) communicated updated cash management guidance for the HEERF through the release of the HEERF II FAQs on January 14, 2021. The HEERF II FAQ #17 specified that grantees are under an obligation to minimize the time between drawing down funds from G5 and paying obligations incurred by the grantee. ED considered institutions compliant if they paid from the HEERF funds emergency grants to students within 15 days of the draw down and for all other uses within 3 days. The Uniform Guidance requires the identification and documentation of costs as federal expenditures to occur prior to or within the timeframe established for paying obligations when grantees must follow enhanced cash management requirements. Condition: The University drew down $53,560 of HEERF funds from the student portion in August 2021 however, a majority of those funds were not disbursed to students within the 15 days after the draw down occurred. Cause: The University was unsure of how the threat of rescission of HEERF funds, communicated by NAASFAA on August 17, 2021, would affect any of their outstanding funding. Therefore, the funds were drawn so as not to be potentially rescinded, but were not distributed to students within the 15 day time frame. Effect: The University could have drawn down funds for ineligible costs or with improper timing if sufficient allowable costs had not been identified that occurred prior to or within 15 days of the drawdown date. If ED identifies an institution as having an elevated risk or are suspected of improperly administering their HEERF grant funds, ED has a range of possible enforcement actions which could include heightened or more frequent reporting, monitoring or auditing of an institution and placing the HEERF grants on ?Route Payment Status?, which requires prior authorization from ED to draw down any remaining funds. As of the audit report date, the University has not received any notifications of any enforcement actions taken against the University related to the HEERF program. Questioned Costs: None. Recommendation: We recommend that the University implement controls and processes to ensure that all expenses are properly identified and documented before any drawdowns are made. Management Response: The funding was drawn down as the result of news publications from various sources in August 2021 indicating that the infrastructure package threatened to take away unused relief funds. At the time, no creditable source was able to confirm whether this meant the University would lose unused HEERF II and III funds. To safeguard the student funding, the University drew down the remaining balance for HEERF II, knowing they would have students to award the funds to shortly thereafter. All other HEERF awards were drawn down on a reimbursement basis.