Finding Text
Finding number: 2023-002
Federal agency: U.S. Department of Education
Programs: Higher Education Emergency Relief Fund
Assistance Listing #: 84.425F, 84.425L
Award year: 2023
Criteria
For Coronavirus Response and Relief Supplemental Appropriations Act HEERF II and American Rescue Plan Act HEERF III, the Certification and Agreements and/or Supplemental Agreements requires that Student Aid Portion (ALN 84.425E) should be disbursed within 15 calendar days of the drawdown from the Department of Education’s G5 grants system (“G5”) and Institutional Aid Portion, (a)(2), and (a)(3) funds (all other ALNs) should be disbursed within 3 calendar days of the drawdown from G5. For lost revenue, the “obligation” occurs on the date the institution completes its estimate of its amount of lost revenue after the estimation period.
Condition
The Federal Government requires the College to disburse the Institutional Aid Portion of HEERF funds within three calendar days of drawdown from G5. During our testing, we noted that the College drew down the entire balance of the HEERF III Institutional Aid portion and HEERF III Minority Serving Institution portion but the balances were not spent by June 30, 2023. The balances were not expended within three calendar days of drawdown as required. This is a summary of the balances unspent at June 30, 2023:
Cause
Due to the inexperience with the HEERF III program, the College did not have adequate procedures in place to ensure that Institutional Aid Funds and Minority Serving Institution Funds were disbursed within three calendar days of drawdown.
Effect
HEERF III Institutional Aid Funds and Minority Serving Institution Funds were drawn down in excess of disbursements and the excess funds remained unspent beyond the three-calendar day threshold for institutional expenditures. Due to these circumstances, the College was not in compliance with the cash management requirement of the HEERF III agreements.
Questioned Costs
255,052
Perspective
Our sample was not, and was not intended to be, statistically valid. We selected one HEERF institutional drawdown to test and it was not disbursed within the required three-calendar day threshold.
Identification as a Repeat Finding, if applicable
See finding 2022-001 included in the summary schedule of prior year findings.
Recommendation
We recommend that the College implements procedures to ensure that future cash drawdowns occur within the required period before or after expending the grant funds. We also recommend the College coordinate with the Department of Education to return the unspent HEERF funds with any applicable interest.
View of Responsible Officials
The College agrees with the finding.