Black Hawk CollegeHigher Education

III. Findings and Questions Costs for Federal Awards Finding 2020-001: Allowable Activities and Period of Performance COVID-19 Education Stabilization Fund ? Higher Education Emergency Relief Fund (HEERF) CFDA No. 84.425 Department of Education Direct Award Grant period: April 25, 2020 through May 5 , 2021 Questioned costs: $14,240 How the questioned costs were computed: $10,400 of questioned costs relates to an individually important item and $3,840 relates to a sample selection of one disbursement that did meet the allowable activities as prescribed by the Department of Education. Condition: We discovered two questioned costs that were not actual cash disbursements paid out. One cost was an estimated year-end accrual of internet stipend reimbursement benefits based on the number of employees at year-end. After the year ended, the actual reimbursements requested by employees was less than originally anticipated. The other cost was for waiver of college application fees which were waivers of expense to the applicant rather than a payment of cash directly to the applicant. In addition, we discovered one expense that was reported in the wrong period of performance. The goods were not received until after year-end. These expenses are allowable but should have been reported in fiscal year 2021. Our testing included six individually important items and a non-statistical sample of 40 transactions out of a population of 1,111. Out of the 6 individually important items and the sample of 40, two transactions were found to be unallowable and one transaction was not reported in the proper period of performance. Criteria: The requirement that costs claimed against the Section 18004(a)(1) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) must be actual expenditures for which checks were written was provided during the October 14, 2020 webinar presented by the Department of Education. Cause: The HEERF program was a new grant for the Department of Education. During implementation, there were multiple forms of guidance issued by the Department of Education subsequent to fiscal year-end related to the allowability of expenditures. The delayed release of final guidance as well as changes in interpretation of guidance meant the College was reclassifying existing expenditures in to the grant as they became eligible and/or ineligible per guidance. This unorthodox approach lead to the opportunity for missteps in the quality control process over allowable activities and period of performance such that unallowable costs went undetected and costs were reported in the improper period. Effect: The program is not in compliance with Department of Education requirements. Recommendation: We recommend that the College modify quality control processes over this grant when additional guidance is issued to ensure internal control deficiencies and noncompliance will be prevented, or detected and corrected on a timely basis. View of responsible officials: Management acknowledges the finding and has prepared a corrective action plan.