From discussions with various clients, for-profit institutions are receiving the following email in regard to future audits of their Higher Education Emergency Relief Funding (HEERF) grants and these emails are causing confusion:
To: Department of Education Grant Recipients
From: Phillip Juengst, Deputy Assistant Secretary, Office of Acquisition and Grants Administration
Subject: Single Audit Submission: Reporting subprogram Assistance Listing Number (ALN)[1] alphas in the Federal Audit Clearinghouse single audit submission form (Form SF-SAC)
Date: August 4, 2021
The Department of Education (Department) is sending this e-mail notification and memo to inform Department grant recipients[2] of guidelines for identifying subprogram ALNs in Form SF-SAC, the cover form completed as part of the submission of a single audit to the Federal Audit Clearinghouse (FAC). Specifically, in order to more precisely identify grant program expenditures, the Department requests that grantees include on the Schedule of Expenditures of the Federal Awards (SEFA) page of Form SF-SAC, if applicable: (1) whether the program is novel coronavirus 2019 (COVID-19) relief assistance; and (2) the subprogram ALN alpha.
Action Requested: On page 2 of the Form SF-SAC, under “Part II: FEDERAL AWARDS” in the chart labeled “Schedule of Expenditures of Federal Awards” under column c with the heading “Additional Award Identification” include the phrase “COVID-19” if the program is considered COVID-19 assistance). Then place a comma (,) after COVID-19 and include the full ALN number and alpha character (A, B, C, etc.).
OMB’s instructions to auditees in the FY 2020 Compliance Supplement instructed auditees to include COVID-19 in Column c (see 2020 Compliance Supplement Appendix VII beginning on page 8-VII-2 at https://www.whitehouse.gov/wp-content/uploads/2020/08/2020-Compliance-Supplement_FINAL_08.06.20.pdf). Additionally, if the program is not considered a “COVID-19” program, include the full ALN and alpha character in column c.
M&A Guidance
If you hold your cursor over the footnote 2, the following wording is displayed: “This memo does not apply to Department for-profit grantees, foreign public grantees, or foreign organization grantees that do not submit single audits to the Federal Audit Clearinghouse (FAC).”
In addition, based upon communication with the Office of Inspector General (OIG), all institutions may be receiving the email listed above. However, a for-profit institution is not subject to the Single Audit requirements, so this guidance is not applicable and is consistent with our understanding of the regulations.
Other Audit Clarifications
M&A also confirmed the future audit requirements in certain circumstances of for-profit institutions with OIG, and those situations are noted below. This is nonauthoritative guidance and it is consistent with the HEERF Audit Guide.
A for-profit proprietary institution with a 12/31/2020 year filed the HEERF Grant audit since they expended over the $500,000 threshold. They did not fully expend all their grant funds and on the “Information Sheet” for the 12/31/2020 audit correctly indicated they had not expended or liquidated all of the HEERF funds as of the fiscal period end date. In 2021, they expended the remaining funds, but their total expenditures were less than $500,000. As it relates to this situation, we have the following questions for the year ended 12/31/2021.
- We assume an audit does not have to be performed since they were under the $500,000 threshold. Is our assumption correct?
- OIG Response: Correct, no audit required.
- If the institution had a finding or findings in the 12/31/2020 audit, and they do not need an audit is there anything which needs to be reported by the institution regarding the corrective action taken? This typically would have been reported in the “Prior Audit Report” section.
- OIG Response: No, nothing required in this case since no audit is required.
- Since the 12/31/2020 audit indicated the funds had not been fully expended or liquidated, is there anything the institution needs to do to indicate that the funds have been fully expended or liquidated and an audit is not needed?
- OIG Response: No, not for audit purposes. The school would indicate Final on their institutional portion quarterly report when they post their final report.
