Finding Text
2023-003 – Cash Management
Funding Agency: U.S. Department of Education
Title: Higher Education Emergency Relief Fund
AL Number: 84.425E, 84.425F, 84.425K
Criteria or Specific Requirement The compliance supplement for the Higher Education Emergency Relief Fund requires that the Student Aid Portion should be disbursed within 15 calendar days of the drawdown from the Department of Education’s G5 grants system and Institutional Aid Portion and all other funds should be disbursed within 3 calendar days of the drawdown from G5.
Condition: We reviewed the cash management requirements of the Higher Education Emergency Relief Fund for the two draws the College made during the fiscal year. During this testing we noted that 2 of the draws exceeded the amounts expended and the funding was not disbursed in 15 days for the Student Aid portion and was not disbursed within 3 days for Tribally Controlled Colleges and Universities portion.
Context: During our testing of draws made for Education Emergency Relief Fund in the prior year we noted that the College had over drawn funds in the amount of $1,017,855. Of that amount, $932,669 was returned to the grantor in March of 2023. During our testing of draws in the current year, we noted that the College made a draw in February 2023 in the amount of $182,237 and expended only $153,387. The College also made a second and final draw in June 2023 in the amount of $957,726 and expended only $644,960. In each case, the excess was not expended in the required timeframe. Finally, the College incurred additional expenditures in the amount of $328,243 in the timeframe of July 2023 through September 2023 leaving a total overdraw of funds in the amount of $98,559 which was returned to the grantor in January of 2024.
Questioned Costs: We noted $98,559 of questioned costs.
Effect: There is a potential for suspension or cessation of federal and/or state funding.
Cause: The ongoing Covid-19 pandemic caused the College to be short staffed during the period when the draws took place and an error occurred.
Recommendation: The College should take steps to ensure that its financial records are maintained on a current basis, reconciled timely, and that cash request are made in accordance with immediate cash needs.
View of Responsible Official: As is the case with most higher education institutions and governmental entities, the College has struggled with the COVID pandemic and its aftermath. Essential functions were disrupted, including several key accounting, finance, functions due to employees being out sick. Chief Dull Knife College had a discrepancy occur when drawing down funds in which it was done in error twice and an aggregate difference from the previous year was carried over. This was discovered and the difference was sent back to HEERF. The HEERF funding has been reconciled and concluded. The College had more than sufficient money in the bank to cover all of their expenses so this money was not used to cover any expenses. Chief Dull Knife College takes the responsibility of drawing money from Grant Programs very crucial and will make all efforts and policies to ensure this type of error does not occur.