Practice makes perfect, right? With year two of the Higher Education Emergency Relief Funding (HEERF) audits in process, we want to share some best practice points before the next HEERF Annual Performance Report (APR) submission period opens.
As a reminder the HEERF APR for the January 1, 2021, to December 31, 2021, reporting period must be submitted between April 11, 2022, to May 6, 2022. The APR includes information that is already disclosed on quarterly HEERF disclosures along with additional information for ED to assess the effectiveness of the program.
From the audits we performed on 2020 expenditures, we identified more findings on the APR than we anticipated and believe some tips and reminders are beneficial for the institutional personnel who are completing this report. Our comments include general best practices along with guidance on specific APR steps. We are hoping institutions will have fewer findings on the second go-around of this report. All of our references to specific questions are based upon the APR form released which can be found here.
The completion of any federal report should have two overarching principles included in the processes:
- Reconciliation to the underlying data
- Secondary review
Reconciling underlying data
We identified errors in which the APR didn’t agree with the underlying support. Most institutions maintained the underlying detail in Excel, which enables the data to be sorted and filtered to ensure accuracy when completing the APR. When completing the institutional expenditures, the following dollar amounts should agree to the supporting detail:
- Institutional expenditures by category
- Total institutional expenditures
The institutional expenditures on the APR should agree with the institutional quarterly reports posted on the website. If the numbers don’t agree, then either the APR or the quarterly reports are incorrect. If the quarterly reports are incorrect, then an amended quarterly report can be prepared and posted to the website. (Reminder: retain any original quarterly report on the website, as well).
Regarding student expenditures, the following reconciliations should be performed with the supporting data:
- Total student grants disbursed
- Student grants disbursed by category (full-time, part-time, Pell eligible and non-Pell eligible)
- Total number of students who received grants should reconcile to the total number of students in the enrollment status section (Question 10)
Secondary reviews
We also identified situations in which the APR was completed and no review of the data was performed prior to submission. As CPAs who draft many audit reports and tax returns, we stress the importance of secondary reviews — other parties, such coworkers, will more critically review work than the person who originally performed it. As a best practice, a second person should review the APR prior to submission.
More on APR
Along with the general best practices that should be followed for any federal report submission, or website disclosure, some specific nuances on the APR are important to note. The comments are from findings we noted on the 2020 report or review of the 2021 APR form.
- Review the tick marks in the footnotes to the form for guidance and explanation.
- All items with an asterisk (*) can be delayed and reported along with the 2022 expenditures when the APR is filed in 2023. This is only a delay and if you have fully expended HEERF grants in 2021, you may still have to file a 2022 APR to report this 2021 information, per tick mark 1.
- Question 8: “Graduates” is referring to students enrolled in graduate programs, not undergraduate students who have graduated.
- Question 8: “Full-time” students are based upon the IPEDS definition. Be careful if your institution has a different definition for full-time and make the appropriate adjustments.
- Question 8: ED defined this as the minimum amount awarded, non-zero, to any one student. On the 2020 report, in some instances, we saw this reported as zero due to the lack of guidance. The form is clearer in that institutions should report the smallest amount paid to students who received HEERF grants.
- Question 8: New line under each grant funding section to report amounts applied directly to a student’s account. (Reminder: an institution needed to obtain a signed authorization from the student.)
- Questions 8d, 8e & 8f: Ensure the total number of students and HEERF grants paid are consistent for all three of these sections.
- Questions 9b and 9c: These sections should agree, regarding the total amount of lost revenue reported.
- Question 11: This category has been expanded into instructional and non-instructional staff. In addition, the report periods are now as of November 1, which differs from the 2020 APR so the prior year numbers can’t just be used.
- Question 11: The APR indicates that the number of Full-Time Equivalents (FTEs) includes positions funded by federal, state, local or other funds, we interpret this to include Federal Work Study students. In addition, the form indicates to include contractors, and thus, we interpret this to include all contractors whether funded from an outside source or not. No guidance is provided on converting part-time employees or contractors to FTEs so an institution should document the basis for its calculations. If the methodology is reasonable and consistent for each time period, this should be supportable for the auditor.
- Finally, if you had a finding on your 2020 APR then you will be able to make corrections during this same time period.
With the submission period coming quickly, the trusted advisors at McClintock & Associates are available to answer questions and provide further guidance. Schedule a chat today.
