HEERF Grant Program Auditing Requirements — Office of Postsecondary Education (March 8, 2021)

Summary

A letter of March 8, 2021 from the U.S. Department of Education's Office of Postsecondary Education to HEERF grantees, signed by Tiwanda Burse, Deputy Assistant Secretary of Management & Planning, setting out the auditing requirements of the Higher Education Emergency Relief Fund. Public and private nonprofit institutions that spend $750,000 or more in Federal awards in a fiscal year must have a single audit under 2 CFR part 200 Subpart F, submitted through the Federal Audit Clearinghouse. Proprietary institutions that spent $500,000 or more in HEERF grant funds, or were on the Heightened Cash Monitoring 1 or 2 lists, must submit a compliance audit to the Department through eZ-Audit. Audit costs may not be charged to the Student Aid Portion (84.425E) or to 84.425Q. Records must be kept for three years from the final expenditure report.

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                              UNITED STATES DEPARTMENT OF EDUCATION
                                 OFFICE OF POSTSECONDARY EDUCATION



March 8, 2021

Dear HEERF Grantee:

The purpose of this letter is to provide an overview of the Higher Education Emergency Relief
Fund (HEERF) grant program auditing requirements. 1 Auditing requirements for the HEERF
grant fund fall into two categories—those public and private nonprofit institutions that may be
required to submit an audit under the Single Audit Act Amendments of 1996 (Single Audit Act)
and proprietary institutions that the U.S. Department of Education (Department) will require to
submit a similar audit to the Department.

Audits form a critical component of the Federal Government’s proper oversight of grant
programs generally, and of the disaster relief provided during the novel coronavirus (COVID-19)
pandemic specifically. Quality audits are reliable and effective tools to improve the integrity and
effectiveness of the Department programs and help reassure the American public, the Congress,
and the Department’s Office of the Inspector General that taxpayer dollars are used efficiently
and effectively.

Single Audits of Public and Private Nonprofit Institutions

Who must obtain an audit?

Any non-Federal entity, including private nonprofit and public institutions, that expends
$750,000 or more during the non-Federal entity’s fiscal year in Federal awards, including student
financial assistance under Title IV of the Higher Education Act of 1965, as amended (Title IV)
and HEERF, must have a single audit conducted in accordance with 2 CFR part 200 Subpart F-
Audit Requirements.

A non-Federal entity that expends less than $750,000 in Federal awards during the non-Federal
entity’s fiscal year is exempt from Federal single audit requirements for that year, except as
noted in 2 CFR § 200.503, but records must be available for review or audit by appropriate
officials of the Federal agency, pass-through entity, and Government Accountability Office
(GAO).

Regardless of the need to submit an audit, all financial records, supporting documents, statistical
records, and all other non-Federal entity records pertinent to a Federal award must be retained for

1
 Please note this letter applies to HEERF grant funds provided under Coronavirus Aid, Relief, and Economic
Security (CARES) Act (HEERF I), the Coronavirus Response and Relief Supplemental Appropriations Act, 2021
(CRRSAA) (HEERF II), and additionally, any HEERF grant funds that may be provided under the American
Rescue Plan (ARP) (HEERF III).
                                      400 MARYLAND AVE., S.W., WASHINGTON, DC 20202
                                                      www.ed.gov

      The Department of Education's mission is to promote student achievement and preparation for global competitiveness by
                                   fostering educational excellence and ensuring equal access.
a period of three years from the date of submission of the last HEERF grant’s final expenditure
report as required by 2 CFR § 200.334.

What must be audited?

Auditors must evaluate assistance listing (CFDA) 84.425 – Education Stabilization Fund in its
entirety to determine if it meets the requirements to be audited as a major Federal program. The
separate grant types or subprograms (including HEERF), which were distributed using alpha
characters at the end of the assistance listing number, are not considered separate programs for
major program purposes.

Auditors of private nonprofit and public institutions must use a risk-based approach, in
accordance with 2 CFR § 200.518, to determine which Federal programs are audited as major
programs during a single audit. The Department has not designated the Education Stabilization
Fund as an automatic high-risk program, but auditors should consider that the Education
Stabilization Fund is a new program not previously audited or subjected to Department
oversight, and the inherent risk that comes with a new program, when determining the major
Federal programs.

The Compliance Supplement is a document that identifies existing, important compliance
requirements that the federal government expects to be considered as part of a single audit, as
well as audit objectives and suggested audit procedures for determining compliance with these
requirements. The 2020 Compliance Supplement is available here. Program objectives, program
procedures, and compliance requirements specific to the Education Stabilization Fund and
HEERF grant program are included in OMB’s 2020 Compliance Supplement Addendum
(December 22, 2020), beginning on page 4-84.425-HEERF-1 (PDF page 66).

How can we pay for this audit?

Under 2 CFR § 200.425, private nonprofit and public institutions may use a reasonably
proportionate share of the costs of audits required by, and performed in accordance with, the
Single Audit Act. That is, if an institution is submitting a single audit of multiple federal
programs, it should reasonably distribute the costs of the single audit among the audited
programs.

Because of the nature of the Student Aid Portion grants (assistance listing 84.425E), no audit
costs may be charged to that program as that grant program may be used only to provide
financial aid grants to students.

Where is the audit submitted?

Single Audits by private nonprofit and public institutions are submitted via the Federal Audit
Clearinghouse (FAC) system. The FAC provides access information and technical support in




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using their system to submit your single audit. For more information, please see their FAQs here
and instructions here, or contact them at either 1-866-306-8779 or govs.fac.ides@census.gov. 2

Submissions must include cover form SF-SAC (Data Collection Form for Reporting on Audits of
States, Local Governments, Indian tribes and Tribal organizations, Institutions of Higher
Education, and Non-profit Organizations), OMB Control Number 0607-0518. More information
regarding this cover form is available here.

When must we submit an audit?

Single audit report submission requirements are described in 2 CFR § 200.512 and generally
require single audit report packages to be submitted within the earlier of 30 calendar days after
receipt of the auditor's report(s), or nine months after the end of the audit period. Under OMB
memorandum M-20-26, those institutions that had normal single audit due dates from March 30,
2020 through June 30, 2020 were allowed to delay the completion and submission of their single
audit reporting package up to six (6) months beyond the normal due date. Those institutions that
have/had normal due dates from July 1, 2020 through June 30, 2021 were given an extension for
up to three (3) months beyond the normal due date by OMB memorandum M-20-26 and
Appendix VII of the 2020 Compliance Supplement Addendum.

Where can we find more information?

More information regarding Single Audits is available at the OIG’s Single Audit webpage here.

Compliance Audits of Proprietary Institutions

Who must obtain an audit?

Any proprietary institution that either (1) expended $500,000 or more in HEERF grant funds
during an institution’s fiscal year, or (2) was on Federal Student Aid’s (FSA’s) Heightened Cash
Monitoring (HCM) 1 or 2 lists in an institution’s fiscal year in which it expended any HEERF
grant funds must submit a compliance audit covering the institution’s administration of the entire
HEERF grant program to the Department. 3 The HEERF compliance audit must be conducted in
accordance with Government Auditing Standards, issued by the Comptroller General of the
United States, and the applicable audit guide developed by the OIG.

A proprietary institution that expended less than $500,000 in HEERF grant funds during an
institution’s fiscal year and is not otherwise on HCM 1 or HCM 2 list during an institution’s
fiscal year in which it expended any HEERF grant funds is exempt from this HEERF compliance
audit requirement for that year, but the grant records must remain available for review or audit
by authorized officials of the Department.


2
  Please note that the Department also requires institutions receiving Title IV program funds to submit via FSA’s eZ-
Audit system.
3
  This includes both the Student Aid Portion and Institutional Portion of CARES Act funding provided to propriety
institutions under assistance listings (CFDA) 84.425E and 84.425F as well as the Proprietary Institutions Grant
Funds for Students program under assistance listing 84.425Q.


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Regardless of the need to submit an audit, all financial records, supporting documents, statistical
records, and all other non-Federal entity records pertinent to a Federal award must be retained for
a period of three years from the date of submission of the last HEERF grant’s final expenditure
report as required by 2 CFR § 200.334.

What must be audited?

OIG’s audit guide, Guide for Compliance Attestation Engagements of Proprietary Schools
Expending Higher Education Emergency Relief Fund Grants (HEERF Audit Guide), will
provide requirements and guidance to satisfy the HEERF compliance audit requirement. To
satisfy the HEERF compliance audit requirement, this HEERF Audit Guide will require an
examination-level attestation engagement. The compliance requirements identified as being
subject to audit in the HEERF Audit Guide will generally be the same as those identified in the
HEERF section of the 2020 Compliance Supplement addendum. The HEERF Audit Guide is
currently being developed and will be available on the OIG’ Proprietary Schools, Foreign
Schools, and Third-Party Servicer Audits webpage once published. Since FSA already requires
an annual audit of all proprietary schools that participate in the Title IV programs, to the extent
practicable, the annual Title IV audit may be used to cover certain areas of the HEERF audit if
separately auditing those areas would be duplicative.

How can we pay for this audit?

Like private nonprofit and public institutions, proprietary institutions may use a reasonably
proportionate share of the reasonable costs associated with implementation of this audit
requirement.

Because of the nature of the Student Aid Portion grant (assistance listing 84.425E) and
Proprietary Institutions Grant Funds for Students (assistance listing 84.425Q), no audit costs may
be charged to those programs as those grant programs may be used only to provide financial aid
grants to students.

Where is the audit submitted?

This audit will be submitted via FSA’s eZ-Audit System, the same system that is already used to
submit the annual Title IV audit. Specific instructions on where and how to submit your audit
will be included in the HEERF Audit Guide, which will be issued subsequent to this letter.

When must we submit an audit?

The audit report package for the compliance attestation engagements must be submitted within
the later of 120 days after issuance of the HEERF Audit Guide, or the submission deadline for
the institution’s annual Title IV audit, as established by 34 CFR § 668.23(a)(4), including any
extensions granted by ED for those audits.




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Where can we find more information?

More information regarding proprietary institution auditing will be available at the OIG’s
Proprietary Schools, Foreign Schools, and Third-Party Servicer Audits webpage here.

General Requirements and Information – All HEERF Grantees

How should we have our auditor conduct the audit or attestation procedures regarding the
HEERF public reporting requirements?

In the 2020 Compliance Supplement Addendum and the HEERF Audit Guide, we ask auditors to
confirm that the institution was both timely and accurate in posting its (1) Section 18004(a)(1)
Student Aid Portion Quarterly Public Reporting (assistance listing 84.425E) and (2) Sections
18004(a)(1) Institutional Portion, (a)(2), and (a)(3) Quarterly Public Reporting (assistance
listings 84.425F, 84.425J, 84.425K, 84.425L, 84.425M, 84.425N, as applicable) reports.

The Department understands that this information may be unique and challenging to audit,
particularly because auditors are asked to verify information posted on a webpage which may not
be accessible during audit fieldwork. For these public reporting requirements, the Department
will accept as evidence of compliance, contemporarily produced emails, webmaster logs, or
other relevant documentation establishing a good-faith indication that the institution posted the
required information at approximately the timelines established by our public reporting
requirements.

Who can we contact for more information?

Please reach out to the following for more information:

   •   For technical support or information on submitting a single audit via the Federal Audit
       Clearinghouse (FAC) system: 1-866-306-8779 or govs.fac.ides@census.gov.
   •   For general inquiries about the HEERF program: HEERF@ed.gov.
   •   For technical assistance related to performing the audit or attestation engagement:
       oignon-federalaudit@ed.gov.

Thank you for all the work you are doing on behalf of our nation’s students during this
challenging year and for your prompt attention to this matter.

Sincerely,



____________________________
Tiwanda Burse,
Deputy Assistant Secretary of Management &
Planning, Office of Postsecondary Education.
Delegated authority to perform functions of
Assistant Secretary, Office of Postsecondary Education.


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