Finding Text
2022 003 Assistance Listing Number, Federal Agency, and Program Name - ALN No. 84.425F; Department of Education; Higher Education Emergency Relief Fund Institutional Portion Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per the grant award and frequently asked questions provided by the Department of Education, the Higher Education Emergency Relief Fund Institutional Portion grant was required to be used for activities to "prevent, prepare for, and respond to the coronavirus." Further, the Higher Education Emergency Relief Fund III frequently asked questions guidance released by the Department of Education provides that institutions may use grant funds "to pay for certain payroll costs, including employee benefits, if (1) such costs are newly associated with coronavirus and (2) the costs were incurred on or after March 13, 2020, the date of the declaration of the national emergency due to the coronavirus." Condition - The University charged unallowable payroll expenditures to the grant, as they were for payroll costs and related employee benefits that were not for costs newly associated with the coronavirus or to prevent, prepare for, or respond to the coronavirus. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the 50 expenditures selected for testing of activities allowed or unallowed, 1 expenditure for faculty payroll was noted that was not allowable, as it was not newly associated with the coronavirus. The expenditure was allowable through the summer 2021 term, as the faculty role had been hired to provide for decreased class sizes due to the coronavirus. However, beginning with the fall 2021 term, decreased class sizes were no longer required by the University, but the University continued to charge the faculty member's salary to the grant. Total unallowed costs related to this issue were $40,232. However, after including allowable lost revenue of approximately $4.2 million, total expenditures incurred by the University exceeded the total grant award by approximately $2.7 million. As such, these unallowed costs are not questioned costs, as allowable lost revenue would be able to be claimed by the University to replace the unallowed costs. Cause and Effect - The University did not have a fully operating process in place to ensure that periodic costs charged to the grant continued to be for activities to prevent, prepare for, and respond to the coronavirus. Recommendation - We recommend that the University put a control process in place to ensure that all ongoing payroll costs charged to the grant are for costs associated with the coronavirus. Views of Responsible Officials and Planned Corrective Actions - Shawnee State University has discontinued charging salaries to the HEERF award. Any potential new salaries or payments for services will be reviewed and evaluated by the program director to certify that the expenses are costs newly associated with the coronavirus or to prevent, prepare for, or respond to the coronavirus