Higher Education Emergency Relief Fund: Audit Guide FAQs from a CPA

The U.S. Department of Education (ED) Office of Inspector General (OIG) recently issued the Higher Education Emergency Relief Fund (HEERF) Audit guide (Guide), effective March 31, 2021.

This audit guide covers grants through the Coronavirus Aid, Relief, and Economic Security (CARES) Act (HEERF I), the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), 2021 (HEERF II), and the American Rescue Plan (ARP) (HEERF III).

The Guide covers all proprietary schools that expended at least $500,000 during their fiscal year or were on either Heightened Cash Monitoring statuses (commonly known as HCM1 or HCM2) during a fiscal year in which HEERF grants were expended.

Below, SST Senior Audit Manager Aaron Lohman answers a few of the most frequently asked questions regarding the Guide.

For more information or guidance on HEERF, contact the experts at SST today.

Q: Why is the Guide only for proprietary schools instead of all schools receiving HEERF grants?

A: Public and nonprofit institutions are subject to single audit reporting requirements. These reporting requirements, found in the compliance supplement, include HEERF Grant funds. Many grant requirements and testing procedures in the Guide mirror those found in the compliance supplement.

Q: When are funds considered “expended”?

A:  Funds are expended when they are applied to their final use. For example, drawing down the funds from the federal funds account to your operating (or separate) bank account is not an expenditure. The expenditure occurs when funds are sent (or “cashed” regarding checks) to students or spent on qualified institutional expenses.

Q: When are HEERF audits due?

A: The later of July 29, 2021 (120 days after the issue date of the Guide) or your school’s standard reporting due date, including available extensions. Subsequent audits will then be due on your school’s standard reporting due date.

Q: How long do the reporting and audit requirements last?

A: It depends on your organization’s receipt and use of funds.  Quarterly reporting requirements will continue until all funds are expended and a final quarterly reporting report is received and approved.  The audit requirement will also be in effect until the last fiscal year funds are expended.

For more information or guidance on HEERF, contact the experts at SST today.