Simpson College

Department of Education ? Education Stabilization Fund (ESF) - COVID-19 ? CRRSAA Act Higher Education Emergency Relief Funds II (HEERF II) - Institutional Portion ? 84.425F Criteria or Specific Requirement ? Institutions must demonstrate that costs incurred are allowable under the relevant statutory provisions and consistent with the purpose of the ESF ?to prevent, prepare for, and respond to coronavirus?. The Institutional Portion of HEERF II may be used to defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll) and to make additional financial grants to students, as well as carry out student support activities authorized by the Higher Education Act (HEA) that address the needs related to Coronavirus. Condition ? Expenditures were identified by the auditor in relation to activities allowed or unallowed and allowable costs compliance requirements that were not allowable under the grant. Questioned Costs ? Questioned costs totaling $34,997 that were not related to Coronavirus all charged to Assistance Listing 84.425F. Questioned costs were calculated by taking all costs charged to certain categories charged to the grant. Context ? Out of a population of 1,020 expenditures, BKD selected 25 for testing. There was one error identified in testing, in which $500 of unallowed costs related to faculty stipends not associated with coronavirus were identified. Effect ? Costs not associated with Coronavirus were charged to the grant. Cause ? The interpretations by management of the program guidance from the U.S. Department of Education allowed for the submission and internal approval of expenditures to be reimbursed by federal funds. Recommendation ? Management should consider changes to their policy surrounding the allowability of expenditures, including documentation of their rationale and supporting guidance for federal expenditures incurred. Views of Responsible Officials and Planned Corrective Action ? The $500 unallowed cost identified above was correctly removed from the cost charged to the HEERF II grant because it fell outside of the HEERF II performance period, and thus was not included on the HEERF II final report submitted to the U.S. Department of Education. Similarly, College management identified $1,500 in other costs that fell outside of the performance period and were therefore removed from the costs charged to the grant. As the $1,500 are included in the $34,997 mentioned above, the remaining $33,497 were examined by College management, who believes the costs to be allowable based on the information within the program guidance and HEERF FAQs issued by the U.S. Department of Education.

Education Stabilization Fund (ESF) ? COVID-19 ? CRRSAA Act Higher Education Emergency Relief Funds II (HEERF II) ? Institutional Portion CFDA 84.425F U.S. Department of Education Finding 2021-004 Expenditures were identified by the auditor in relation to 1) activities allowed or unallowed and 2) allowable costs compliance requirements that were not allowable under the grant. Questioned costs totaling $34,997 that were not related to Coronavirus all charged to Assistance Listing 84.425F. Questioned costs were calculated by taking all costs charged to certain categories charged to the grant. Out of a population of 1,020 expenditures, BKD selected 25 for testing. There was one error identified in testing, in which $500 of unallowed costs related to faculty stipends not associated with coronavirus were identified. Planned Corrective Action The $500 unallowed cost identified above was correctly removed from the cost charged to the HEERF II grant because it fell outside of the HEERF II performance period, and thus was not included on the HEERF II final report submitted to the U.S. Department of Education. Similarly, College management identified $1,500 in other costs that fell outside of the performance period and were therefore removed from the costs charged to the grant. As the $1,500 are included in the $34,997 mentioned above, the remaining $33,497 were examined by College management, who believes the costs to be allowable based on the information within the program guidance and HEERF FAQs issued by the U.S. Department of Education. Contact Person Responsible for Corrective Action Mason Sander, mason.sander@simpson.edu, 515-961-1579 Anticipated Completion Date May 31, 2022

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