Finding Text
Finding 2022-003 - U.S. Department of Education (USDE), Education Stabilization Fund (ESF) Higher Education Emergency Relief Fund (HEERF) (Material Weakness): Information on the federal program - HEERF Student Aid Portion, AL No. 84.425E, June 30, 2022; HEERF Institutional Portion, AL No. 84.425F, June 30, 2022; HEERF Historically Black Colleges and University's (HBCUs), AL No. 84.425J, June 30, 2022 Criteria - Federal regulations governing HEERF funding. Condition - We noted material weaknesses in the testing of expenditures under the HEERF funding received by the College. Questioned Costs - $73,115. Context- We observed the following during our testing of compliance with HEERF expenditures: Four (4) employees were paid bonuses totaling $21,000 which are unallowable costs under the HEERF program. Two (2) expenditures totaling $43,265 were missing the competitive bidding or explanation of selection for the contractor. One (1) disbursement package totaling $1,300 was not provided. The College erroneously recorded $7,550 in expenditures to HEERF that were for operations and another grant. College proposed an entry to reclass the expenditures; however, these amounts were included in the drawdown requests made during the year. Cause - It appears the above instance resulted in staff not properly following through with its procurement policies and following the guidelines of allowable activities and cost governing the Institutional and HBCU portions for the HEERF funding. Effect - Instances of noncompliance of the above regulations may result in sanctions being imposed or repayment for unallowable costs. Repeat Finding - No. Auditor's Recommendation - We recommend that the College review the HEERF funding requirements and ensure all staff members are familiar with the requirements to avoid incurring a liability to the U.S. Department of Education for non-compliance. Measures should be taken to specifically remedy the above findings. Views of Responsible Officials - Management will implement procedures to properly review HEERF expenditures and ensure proper compliance for exclusion on unallowable costs, presence of proper documentation of expenditures, including inclusion of com- petitive bids. Management will also implement procedures to ensure proper entry and review of the classification of grant expenditures.