Finding Text
2022-010: Internal Control and Compliance – Higher Education Emergency Relief Funds (HEERF)
Federal Agency:
Department of Education
Federal Program Title:
Education Stabilization Fund (ESF)
Assistance Listing Number:
84.425E, 84.425F
Award Number and Year: P425E201739 (May 1, 2020 – June 30, 2023),
P425F200479 (May 1, 2020 – June 30, 2023),
Award Period:
July 1, 2021 – June 30, 2022
Type of Finding: Material Weakness in Internal Control over Compliance
Material Noncompliance (Modified Opinion)
Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The University must comply with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) – HEERF I for all applicable assistance listing numbers under 84.425E and 84.425F, which were continued under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) – HEERF II and American Rescue Plan (ARP) – HEERF III as to the use of the funds and required reporting.
Condition: During the year 2022, the University continued to utilize the HEERF Student Aid Portion and the HEERF Institutional Portion. Collectively, the HEERF awards (or program) was a major federal program for the year ended June 30, 2022. The internal controls over the compliance and administration of the new program requires management of the University to comply with all direct and material compliance requirements outlined in the federal Compliance Supplement for 2022 for the HEERF program. While the University established a plan to distribute funds to students in accordance with the requirements and to cover qualified expenditures for the institution portion, it failed to properly maintain detailed records of the actual distributions to each student so that a reconciliation of the distributed funds could be reconciled to the subsidiary accounts in the general ledger. In addition, the University failed to properly maintain its documentation of the lost revenue calculation as required by the CARES Act and the expenditure detail for the institution portion. The University also failed to provide complete evidence of the quarterly and annual reporting as required under the CARES Act, CRRSAA, and ARP regulations.
Questioned Costs: $518,388
Context: During the audit procedures, the University was unable to provide documentation for required compliance testing, specifically:
• Activities Allowed and Unallowed – Institutional Portion
• Allowable Costs – Institutional Portion
• Cash Management – Student and Institutional Portion
• Period of Performance Testing – Institutional Portion
• Procurement Testing – Institutional Portion
• Suspension and Debarment Testing – Institutional Portion
• Reporting Testing
Cause: The University experienced turnover in the department responsible for this process.
Effect: The University is unable to adequately document its compliance with the requirements of the HEERF program administered. Reports submitted are not in compliance with the reporting and information-sharing requirements established by the Department of Education. Expenditures may be incorrectly charged to the program.
Repeat Finding: Yes – 2021-005.
Recommendation: We recommend the institutions strengthen their understanding of the compliance and reporting requirements established by grant programs and ensure supporting documentation is maintained to substantiate amounts reported, compliance with requirements is supported by University records, and ensure that federal expenditures are properly identified and classified.
Views of Responsible Officials: There is no disagreement with the audit finding.