Finding Text
2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.403 Factors
affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following
general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the
performance of the Federal award and be allocable thereto under these principles. (b) Conform to any
limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost
items.
Section 2003 of the American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2) (award or grant) by the U.S.
Department of Education (Department) are governed by section 2003 of the ARP and section 314 of the
Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) (Pub. L. 116-260)
and the following terms and conditions of this Certification and Agreement (C&A): Use of Grant Funds: 1.
Section 2003(7) of the ARP requires Recipient, an institution of higher education as defined in section 101
or 102(c) of the Higher Education Act of 1965, as amended (HEA), 20 USC § 1001 or 1002(c), to provide
emergency financial aid grants to students in an amount equivalent to the sum of two amounts: 50 percent
of the portion of its allocation that is based on formula factors from CRRSAA section 314(a)(1)(A)-(D) and
100 percent of the portion of its allocation that is based on formula factors from CRRSAA section
314(a)(1)(E)-(F). The amount of funds made available by this award under Assistance Listing Number
(ALN) 84.425E represents the minimum amount that Recipient must use for making emergency financial
aid grants to students. 2. Under section 2003(7) of the ARP and section 314(c)(3) of the CRRSAA, Recipient
must make emergency financial aid grants to students (which may include students exclusively enrolled in
distance education), which may be used for any component of the student’s cost of attendance or for
emergency costs that arise due to coronavirus, such as tuition, food, housing, health care (including mental
health care), or child care.
The Center failed to spend $12,517 of its ARP #84.425E funds on grants to students, funds were spent on
administrative expenditures. In addition, interest submitted to the Department of Health and Human
Services owed from the prior audit period was paid from HEERF funds in the amount of $328 and Adult
Education fund in the amount of $396, however since the interest earned was all credited to the General
fund, the repayment to the Department of Health and Human Services should have been made from the
General fund.
Failure to expend funds as required under the grant agreement could lead to future questioned costs,
reduced future federal funding, and the requirement to repay the Department of Health and Human
Services. The Treasurer and Superintendent should ensure expenditures paid by federal grant funds are
within the constraints of the grant agreement.