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Bunker Hill Community College Did Not Accurately Record and Report the Institutional Portion of Higher Education Emergency Relief Funds and the Governor’s Emergency Education Relief Fund.

By commingling federal funds, BHCC creates a risk that they may not be used for their intended purpose, restricts its ability to report accurately, and may jeopardize future federal funding eligibility.

Table of Contents

Overview

Bunker Hill Community College (BHCC) did not individually identify in its accounts all federal pandemic-related institutional funding received and expended. Specifically, the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act (Higher Education Emergency Relief Fund, or HEERF, I), Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) (HEERF II), and Governor’s Emergency Education Relief (GEER) Fund institutional funding were commingled in a single account in its Colleague accounting system. By commingling federal funds, BHCC creates a risk that they may not be used for their intended purpose, restricts its ability to report accurately, and may jeopardize future federal funding eligibility.

According to BHCC management, upon notification of the grant of CARES Act and GEER funding in late fiscal year 2020, the college’s Budget Office began to maintain a spreadsheet that listed all institutional purchases that were eligible for reimbursement from that funding. Subsequently, in July 2020 (i.e., the beginning of fiscal year 2021), BHCC established an account in Colleague to track all institutional purchases made with pandemic funding. This account did not distinguish between the CARES Act and GEER funding. In addition, in December 2020, when the CRRSAA was passed by Congress, BHCC was awarded additional institutional funding in the HEERF II Program. Institutional expenditures that were eligible for reimbursement under the CRRSAA were also recorded in the aforesaid account in Colleague.

In addition, after the audit period (in November 2021), the quarterly reports for the fiscal quarters ended September 30, 2020; December 31, 2020; and March 31, 2021 were amended to correct information that had been reported previously.

BHCC gave us a General Ledger Trial Balance (GLTB) Report from Colleague that showed all general ledger transactions for the audit period. Using the BHCC-maintained spreadsheet and GLTB Report, we attempted to identify CARES Act, CRRSAA, GEER Fund, and non–2019 coronavirus (COVID-19) transactions in Colleague. We noted discrepancies between the GLTB data and the spreadsheets.

Authoritative Guidance

Section 200.302(b) of Title 2 of the Code of Federal Regulations, which the federal Office of Management and Budget (OMB) uses in its Uniform Guidance (2014), requires the following:

The financial management system of each non-Federal entity [such as BHCC] must provide for the following:

(1)     Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. . . .

(2)     Accurate, current, and complete disclosure of the financial results of each Federal award or program.

Reasons for Issue

BHCC stated that the federal guidelines were not clear about the need to separate the funding and how to properly report its use.

Recommendations

  1. BHCC should establish OMB-compliant identification for each federal grant in Colleague.
  2. BHCC should train employees who are charged with the administration of federal grants on the requirements for compliance with OMB’s Uniform Guidance.

Auditee’s Response

Separate revenue and expenditure accounts were required for individual HEERF grants. Due to a miscommunication, separate accounts were not set up.

Each iteration of the grant had the same award number, and as a result, revenue was not separately accounted for. Nevertheless, expenditures were tracked correctly. The revenue sources were accounted for in spreadsheets, but not in the system. These spreadsheets agreed in total with each separate grant in the reports that were sent to the State and Federal Government.

We agree with the auditors’ recommendations, and we are making the following improvements to correct the processes:

  • All grants will be routed through our grants department first where staff are experts in grant management, the funds will be set up appropriately in a separate account through projects accounting. Once funds are set up, the department overseeing the spending will receive training and advisement from the grants office.
  • During the training, the grants department will review with the department all parameters of the grant, including OMB compliance information, if applicable, to ensure funds are spent appropriately.

Auditor’s Reply

Based on the response above, BHCC is taking measures to address our concerns.

Date published: June 13, 2022

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