Finding Text
COVID‐19 Higher Education Emergency Relief Funds – Institution Share – Department of Education
Federal Financial Assistance Listing #84.425F
Activities Allowed or Unallowed and Allowable Costs/Costs Principles
Significant Deficiency in Internal Control
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that they entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The University’s lost revenue calculation should be calculated on a reasonable and consistent method.
Condition: The University’s calculated lost revenue was based on the average credit hours per semester prior to COVID‐19 as compared to fiscal years 2020, 2021 and 2022. There was a formula error in the credit hours used during COVID‐19 resulting in an understated amount of lost revenue from the intended methodology.
Cause: The University’s internal control process did not detect that the lost revenue based on credit hours was improperly calculated.
Effect: The lost revenue calculation was understated by approximately $750,000.
Questioned Costs: None as the University’s lost revenue available only would have increased.
Context/Sampling: Lost revenue for all applicable years and revenue streams were tested and reviewed.
Repeat Finding from Prior Years: No
Recommendation: The University should review controls in place to ensure lost revenue is calculated consistently.
Views of Responsible Officials: Management agrees. Management’s complete response can be found in the separately issued corrective action plan.