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Home Source documents The Office of Postsecondary Education's Oversight of Higher Education Emergency Relief Fund Grants (ED-OIG/A20CA0029)

The Office of Postsecondary Education's Oversight of Higher Education Emergency Relief Fund Grants (ED-OIG/A20CA0029)

Issuer
U.S. Department of Education, Office of Inspector General
Document type
Report
Date
2022-06-01

Full text

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                      U.S. Department of Education
                      Office of Inspector General




     The Office of Postsecondary
     Education’s Oversight of Higher
     Education Emergency Relief
     Fund Grants
     June 1, 2022
     ED-OIG/A20CA0029

     ED OIG Oversight of Coronavirus Response Funds
NOTICE
Statements that managerial practices need improvements, as well as other conclusions
and recommendations in this report, represent the opinions of the Office of Inspector
General. The appropriate Department of Education officials will determine what
corrective actions should be taken.

In accordance with Freedom of Information Act (Title 5, United States Code,
Section 552), reports that the Office of Inspector General issues are available to
members of the press and general public to the extent information they contain is not
subject to exemptions in the Act.
                          UNITED STATES DEPARTMENT OF EDUCATION
                                         OFFICE OF INSPECTOR GENERAL

                                                                                                                      Audit Services




June 1, 2022


TO:            Michelle Asha Cooper, Ph.D.
               Deputy Assistant Secretary for Higher Education Programs Delegated the Authority to
               Perform the Functions and Duties of the Assistant Secretary, Office of Postsecondary
               Education

FROM:          Bryon S. Gordon /s/
               Assistant Inspector General for Audit

SUBJECT:       Final Audit Report, “The Office of Postsecondary Education’s Oversight of Higher
               Education Emergency Relief Fund Grants,” Control Number ED-OIG/A20CA0029


Attached is the subject final audit report that consolidates the results of our review of the Office of
Postsecondary Education’s oversight of Higher Education Emergency Relief Fund grants. We have
provided an electronic copy to your audit liaison officer. We received your comments on the draft of this
report and considered them as we prepared the report.

U.S. Department of Education policy requires that you develop a final corrective action plan within
30 days of the issuance of this report. The corrective action plan should set forth the specific action
items and targeted completion dates necessary to implement final corrective actions on the finding and
recommendations contained in this final audit report. Corrective actions that your office proposes and
implements will be monitored and tracked through the Department’s Audit Accountability and
Resolution Tracking System.

In accordance with the Inspector General Act of 1978, as amended, the Office of Inspector General is
required to report to Congress twice a year on the audits that remain unresolved after 6 months from
the date of issuance.

We appreciate your cooperation during this review. If you have any questions, please contact me at
(202) 987-0162 or Bryon.Gordon@ed.gov or Daniel Schultz, Director of Pandemic Relief Audits, at
(202) 262-1046 or Daniel.P.Schultz@ed.gov.

Attachment




                                400 MARYLAND AVENUE, S.W., WASHINGTON, DC 20202-1510

                Promoting the efficiency, effectiveness, and integrity of the Department’s programs and operations.
Table of Contents
Results in Brief .................................................................................................................... 1
Introduction ........................................................................................................................ 5
Finding. OPE Needs to Strengthen its Oversight Processes to Ensure that Schools Use
HEERF Grant Funds Appropriately and Performance Goals are Met ................................. 8
Appendix A. Scope and Methodology............................................................................... 22
Appendix B. Acronyms and Abbreviations........................................................................ 25
OPE Comments ................................................................................................................. 26
               Results in Brief
               What We Did
               The objective of the audit was to determine whether the Office of Postsecondary
               Education (OPE) has an adequate process in place to ensure that institutions of higher
               education (schools) use Higher Education Emergency Relief Fund (HEERF) grant funds
               appropriately and that performance goals are met. Our audit covered OPE’s oversight
               and monitoring activities in these areas from March 2020 through February 2022. It also
               included related activities1 performed by other U.S. Department of Education
               (Department) offices.

               To achieve our objective, we interviewed officials from OPE and other Department
               offices who were responsible for processes associated with administering and
               monitoring HEERF grant funds and for establishing and monitoring HEERF performance
               goals. We also reviewed records relevant to these processes, including OPE guidance,
               technical assistance, and other documents covering schools’ application for, use of, and
               reporting on HEERF grant funds; and the Department’s fiscal year (FY) 2020 Annual
               Performance Report and FY 2022 Performance Plan.

               What We Found
               OPE needs to strengthen its oversight processes to ensure that schools use HEERF grant
               funds appropriately and that performance goals are met. OPE established and
               implemented several controls to promote transparency and accountability in program
               administration, including providing guidance and other technical assistance to schools
               on the appropriate uses of HEERF grant funds, requiring that schools post to their
               websites or submit to OPE various reports on their uses of funds as well as other
               information (HEERF reports), and taking steps to expand independent audit coverage for
               schools. However, OPE did not perform or document several key activities that are
               essential to effective program oversight. Specifically, OPE did not (1) develop a
               monitoring framework to guide its monitoring practices, procedures, and controls;
               (2) conduct a risk assessment of the HEERF program to identify potentially significant
               areas of concern; and (3) design and implement a risk-based monitoring plan to provide




1
  These activities included developing grant funding allocation tables for schools, developing and
overseeing the HEERF annual reporting data collection forms, resolving HEERF-related external audit
findings, and coordinating the approval of HEERF-related products (for example, Frequently Asked
Questions documents) through the Office of Management and Budget.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                      1
              assurance that HEERF grant funds are being used appropriately and performance goals
              are being met.

              Regarding performance goals, OPE established a metric related to the timeliness of its
              initial HEERF awards to schools. However, OPE did not otherwise establish any clear
              performance goals for the HEERF program or specific metrics that would provide a basis
              against which it could monitor individual schools’ performance or report on outcomes at
              the program level. The quarterly and annual HEERF reports that OPE required schools to
              complete contain information on uses of funds that could be useful for performance
              monitoring and to help gauge program effectiveness. OPE planned to rely on these
              HEERF reports as well as independent audits to make information on schools’ uses of
              HEERF grant funds available for public transparency and accountability purposes.
              However, OPE did not have a process for compiling and assessing information from
              schools’ audits and reports, and it needs to take additional actions to fulfill its oversight
              responsibilities by using relevant and available information to improve its monitoring of
              school compliance and program performance.

              Challenges encountered in grantee oversight can partly be attributed to increased
              workload and resource demands related to administering and monitoring a new
              program with a large number of grantees. In response to the increase in OPE’s workload
              with the addition of the HEERF grants, HEERF-related responsibilities were spread across
              OPE and many existing OPE employees had to supplement their normal grant workload
              with additional HEERF-related tasks. According to OPE, its administration of the HEERF
              program has been in a state of continuous improvement and its plans for monitoring are
              evolving. While we recognize the benefits of improving processes over time, we urge
              OPE to finalize its monitoring plans as soon as possible given that the HEERF program
              has already been operational for about 2 years and many of the activities described in
              this finding should be performed early in program implementation.

              Without effective oversight processes, there is an increased risk that OPE will not
              identify or become aware of significant compliance or performance issues involving the
              $76 billion HEERF program. Schools’ misuse or mismanagement of HEERF grant funds
              reduces the funds available for students who need them. Additionally, OPE’s limited
              efforts around performance management affect its ability to describe in clear and
              quantifiable terms the overall impact of the HEERF program, which is critical to
              demonstrating to the public how this large investment of public funds has been used
              and also could help inform oversight and deliberations within Congress concerning
              future emergency funding. Lastly, because OPE has not performed or documented
              several key activities, it may not have the information that it needs to make informed
              and strategic decisions concerning staffing levels and other resources that are necessary
              to ensure effective program oversight.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                         2
              What We Recommend
              We recommend that the Assistant Secretary for OPE develop guidance containing key
              steps for OPE staff to follow if they are tasked with implementing emergency programs
              when experiencing resource and time constraints. We also recommend that the
              Assistant Secretary for OPE develop a monitoring framework for the HEERF program
              that uses a risk assessment process to identify and prioritize significant program risks,
              and design and implement a risk-based monitoring plan and associated key control
              activities. The plan should ensure that OPE focuses its monitoring efforts and targets its
              resources on schools and areas identified as posing higher risks of noncompliance with
              program requirements, including those related to uses of funds, and on performance
              outcomes established in alignment with HEERF program objectives, which OPE must
              also ensure are clearly defined and assessed on an ongoing basis.

              OPE Comments and Our Response
              We provided a draft of this report to OPE for comment. We summarize OPE’s comments
              at the end of the finding and provide the full text of the comments at the end of this
              report.

              While OPE did not state whether it agreed or disagreed with the finding, OPE stated that
              the finding and recommendations did not sufficiently recognize the challenges that it
              faced when administering the HEERF program and the improvements that it made on a
              continuous basis. OPE partially agreed with both of our recommendations and described
              some of the actions it has taken or will take in response to our recommendations.

              OPE partially agreed with Recommendation 1.1, stating that it would develop additional
              guidance with key steps for OPE staff to follow if they are tasked with implementing
              emergency programs in the future. OPE also partially agreed with Recommendation 1.2,
              stating that it is appropriate to develop a monitoring framework for the HEERF program
              that uses a risk assessment process to identify and prioritize significant program risks.
              OPE stated that it has done this over the course of the HEERF program and described
              some of its monitoring efforts, which it said are continuously improving. OPE also said
              that it planned to use the OPE Monitoring and Compliance Plan, in conjunction with a
              HEERF Monitoring Plan, to guide its monitoring efforts. Additionally, OPE described
              some of the challenges it faced, including its awarding of 30,000 grants across 3 pieces
              of legislation while simultaneously developing the HEERF program and navigating the
              national emergency with limited staff and resources. Lastly, OPE noted that it worked to
              implement as many processes as it practicably could, given the need to quickly
              distribute grant funds to schools to address the national emergency.

              We disagree with OPE’s suggestion that our report does not sufficiently recognize the
              challenging circumstances under which it was operating when implementing the HEERF


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                       3
              program and its evolving oversight efforts. This report acknowledges and describes the
              challenges that OPE faced and the actions taken to promote transparency and
              accountability for the HEERF program, while also making some recommendations for
              improvement.

              Regarding Recommendation 1.1, OPE’s proposed action to develop additional guidance
              with key steps for OPE staff to follow if they are tasked with implementing emergency
              programs in the future, if implemented as described, is responsive to this
              recommendation.

              Regarding Recommendation 1.2, we do not agree that OPE had a monitoring framework
              in place over the course of the HEERF program. As noted in the finding, OPE did not
              perform or document several key activities (such as developing a monitoring
              framework, conducting a risk assessment, and designing and implementing a risk-based
              monitoring plan) that are essential to effective program oversight and required by the
              Department’s Guide for Managing Formula Grant Programs that OPE purported to
              follow. While we acknowledge that OPE’s plans to use the OPE Monitoring and
              Compliance Plan and HEERF Monitoring Plan to guide its monitoring efforts could
              address some of the issues identified in this finding, OPE had not used either plan as a
              guide as of the end of our audit fieldwork. OPE’s original plan to follow the
              Department’s Guide for Managing Formula Grant Programs, in conjunction with its
              proposed action to use the OPE Monitoring and Compliance Plan and HEERF Monitoring
              Plan, would be responsive to our recommendation if OPE addresses the missing key
              monitoring actions it has yet to implement.

              We did not revise the finding or recommendations in response to OPE’s comments. We
              did, however, add another step that OPE took to promote transparency and
              accountability for the HEERF program.




U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                       4
               Introduction
               The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on
               March 27, 2020, provided about $14 billion for the Higher Education Emergency Relief
               Fund (HEERF) program to mitigate the impact of the coronavirus on students and
               schools. After the CARES Act, Congress passed two additional coronavirus relief laws
               that provided additional HEERF funding. The Coronavirus Response and Relief
               Supplemental Appropriations Act (CRRSAA) was signed into law on December 27, 2020,
               authorizing an additional $22.7 billion for the HEERF program. On March 11, 2021, the
               American Rescue Plan (ARP) was signed into law, authorizing $39.6 billion in additional
               HEERF funding. The HEERF funds were to be used to defray expenses associated with
               the coronavirus, carry out student support activities, and provide financial aid grants to
               students. Collectively, more than $76 billion was provided for the HEERF program
               through the CARES Act, CRRSAA, and ARP.2 The U.S. Department of Education’s
               (Department) Office of Postsecondary Education (OPE) is responsible for administering
               and overseeing the HEERF grants, which were awarded to more than 4,900 schools. As
               part of its oversight duties, OPE is responsible for monitoring schools to ensure that they
               use HEERF grant funds appropriately and that HEERF performance goals are met.

               Office of Postsecondary Education
               OPE administers more than 60 programs that were intended, in part, to increase access
               to quality postsecondary education. Enactment of the CARES Act in March 2020 led to a
               significant increase in OPE’s grant administration and oversight workload. In fiscal year
               (FY) 2019, prior to the enactment of the CARES Act, OPE was responsible for
               administering about 5,000 grants. However, OPE’s workload more than tripled to almost
               17,000 grants in FY 2020 with the addition of the HEERF grants. By the end of May 2021
               (about 14 months after the CARES Act was enacted), OPE had awarded $66 billion in
               HEERF funding—about 33 times more than the $2 billion it has typically awarded each
               year.

               HEERF Program Administration and Structure
               Shortly after the CARES Act was enacted, senior leaders from OPE and other
               Department offices, including the Office of the Under Secretary (OUS); Office of
               Planning, Evaluation, and Policy Development (OPEPD); Office of the General Counsel
               (OGC); and Office of Finance and Operations (OFO), collaborated to help implement the


2
  As of March 7, 2022, OPE had awarded $75 billion (99 percent) of the more than $76 billion in HEERF
funding provided by the CARES Act, CRRSAA, and ARP, which comprises 10 subprograms that are
identified by separate Assistance Listing Numbers.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                        5
                 HEERF program and make early HEERF-related decisions. Two committees (Steering
                 Committee and Operations Committee) and a work group were established within the
                 Department to help facilitate this process. The committees and work group were
                 composed of senior political leaders, career employees, or both, from several
                 Department offices, including OUS, OPE, OPEPD, OGC, OFO, and the Office of
                 Elementary and Secondary Education (OESE). They helped implement the HEERF
                 program by making key strategic decisions regarding the HEERF framework and funding,
                 reviewing policy and operational issues, and performing the daily activities necessary to
                 execute the strategy, respectively. By August 2021, OPE’s Emergency Response Unit
                 (ERU) had fully taken over the responsibility of administering and overseeing the HEERF
                 program. The table below provides additional information about the composition and
                 responsibilities of the committees, work group, and ERU.

                 Table. Composition and Responsibilities of the HEERF Committees, Work Group,
                 and ERU
      Entity                           Composition                                   Responsibilities

     Steering        Established in March 2020, the committee was          The committee was established to
    Committee        initially composed of senior political leaders from   help implement the CARES Act
                     several Department offices including OUS, OPEPD,      Emergency Stabilization Fund
                     and OFO. The committee’s composition expanded         programs, including the HEERF
                     over time to include career employees and             program. The committee was
                     political staff and employees from additional         responsible for making key strategic
                     Department offices, including OGC.                    decisions for the HEERF program,
                                                                           including decisions regarding the
                                                                           basic framework of the program,
                                                                           methodology for allocating and
                                                                           awarding grant funds to schools, and
                                                                           how best to distribute funds to
                                                                           schools.

    Operations       Established in March 2020, the committee was          The committee was responsible for
    Committee        composed of the Assistant Secretary and senior        reviewing policy and operational
                     advisors at OPE, as well as senior leaders and        matters for the HEERF program.
                     career employees at OPEPD and OESE.




U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                                  6
      Entity                        Composition                                  Responsibilities

    Work Group    Established in March 2020, the work group was        The group was responsible for
                  composed of senior career employees from             establishing the processes and
                  several Department offices including OPE, OPEPD,     related guidance needed to execute
                  OGC, and OFO. As of the end of our fieldwork in      the key strategic decisions made by
                  February 2022, a work group focused on HEERF         the Steering Committee. It performed
                  funding provided under ARP was still operational.    daily activities to execute the
                                                                       committee’s strategy and developed
                                                                       key documents, such as Frequently
                                                                       Asked Questions (FAQ) documents
                                                                       and Recipient Funding Certification
                                                                       and Agreement forms.

       ERU        Established the ERU within OPE in                    The ERU is responsible for
                  September 2020. Prior to this, OPE officials and     administering and overseeing the
                  staff who typically worked on non-HEERF matters      HEERF program, which in part
                  adjusted their work priorities to help develop and   includes monitoring schools’ use of
                  implement the HEERF program. In addition, an         HEERF grant funds and progress
                  employee from OGC was detailed to OPE to help        towards achieving HEERF
                  implement the HEERF program.                         performance goals.




U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                              7
              Finding. OPE Needs to Strengthen its Oversight
                Processes to Ensure that Schools Use HEERF
                Grant Funds Appropriately and Performance
                Goals are Met
              OPE needs to strengthen its oversight processes to ensure that schools use HEERF grant
              funds appropriately and performance goals are met. OPE established and implemented
              several controls to promote transparency and accountability in program administration,
              including providing guidance and other technical assistance to schools on the
              appropriate uses of HEERF grant funds, requiring that schools post to their websites or
              submit to OPE various reports on their uses of funds as well as other information (HEERF
              reports), and taking steps to expand independent audit coverage for different types of
              schools. However, OPE did not perform or document several key activities that are
              essential to effective program oversight. Specifically, OPE did not (1) develop a
              monitoring framework to guide its monitoring practices, procedures, and controls;
              (2) conduct a risk assessment of the HEERF program to identify potentially significant
              areas of concern; and (3) design and implement a risk-based monitoring plan to provide
              assurance that HEERF grant funds are being used appropriately and performance goals
              are being met.

              Regarding performance goals, OPE established a metric related to the timeliness of its
              initial HEERF awards to schools. However, OPE did not otherwise establish any clear
              performance goals for the HEERF program or specific metrics that would provide a basis
              against which it could monitor individual schools’ performance or report on outcomes at
              the program level. The quarterly and annual HEERF reports that OPE required schools to
              complete contain information on uses of funds that could be useful for performance
              monitoring and to help gauge program effectiveness. OPE planned to rely on these
              HEERF reports and independent audits to make information on schools’ uses of HEERF
              grant funds available for public transparency and accountability purposes. However,
              OPE did not have a process for compiling and assessing information from schools’ audits
              and reports. As a result, OPE needs to take additional actions to fulfill its oversight
              responsibilities by using relevant and available information to improve its monitoring of
              school compliance and program performance. Without effective oversight processes,
              there is an increased risk that OPE will not identify or become aware of significant
              compliance or performance issues involving the $76 billion HEERF program.

              OPE Took Certain Steps to Promote Transparency and
              Accountability
              OPE, in collaboration with other Department offices including OGC, OPEPD, and OFO,
              established certain controls when implementing the HEERF program that were


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                     8
               intended, in part, to help ensure that schools received funds timely and were informed
               of the appropriate uses of HEERF grant funds. OPE’s primary goal after the CARES Act
               was enacted was to allocate and award HEERF grant funds to schools as quickly as
               possible, aligning with the Department’s priorities and at least part of the Office of
               Management and Budget’s (OMB) guidance at the time.3 To achieve its primary goal,
               OPE used the Department’s existing grants management system to help expedite
               schools’ access to HEERF grant funds. To help inform schools of the HEERF requirements
               and appropriate uses of HEERF grant funds, OPE, in collaboration with other
               Department offices, took multiple actions, which evolved over time. Specifically, OPE
               divided the primary HEERF funding stream into separate subprograms, including one for
               institutional costs and another for emergency financial aid grants to students, in
               response to the CARES Act requirement that schools distribute at least 50 percent of
               their primary HEERF funding stream to students as emergency financial aid grants to
               help cover expenses related to the disruption of campus operations due to the
               coronavirus. Schools could use the remaining funds for additional emergency financial
               aid grants, or to cover any costs associated with significant changes to the delivery of
               instruction due to the coronavirus.

               OPE also prepared several FAQ documents that provided information in key areas, such
               as the HEERF grant application process, proper use of funds, reporting requirements,
               cash management, and other areas of technical assistance. According to OPE, all major
               HEERF program design decisions and related products (for example, FAQ documents)
               were cleared through OMB. In addition, OPE established a HEERF mailbox and phone
               line (HEERF Customer Care Center) for stakeholders to submit questions, and provided
               other technical assistance and guidance to schools through letters, memoranda, and
               webinars. It also prepared Recipient Funding Certification and Agreement forms that
               described or included references to applicable Federal requirements that HEERF grant
               recipients must adhere to, and it required recipients to sign those forms prior to
               receiving HEERF grant funds. OPE strengthened the language in the Recipient Funding
               Certification and Agreement forms for CRRSAA and ARP grant recipients based on some
               of the lessons it learned from the CARES Act process. For example, OPE incorporated the
               Federal cash management requirements into the forms instead of only including
               references to those requirements, and it added a ‘commitment to compliance’
               certification for proprietary schools because it deemed them to be higher risk. OPE also



3
  OMB Memorandum M-20-21, “Implementation Guidance for Supplemental Funding Provided in
Response to the Coronavirus Disease 2019” (April 2020), instructed agencies to balance speed with
transparency and consider three core principles: mission achievement, expediency, and transparency
and accountability.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                      9
                told us that after ARP was enacted, schools that were closing or on Heightened Cash
                Monitoring (HCM) 2 were placed on “route pay,” which required those schools to
                submit a request and describe how HEERF program funds would be used before they
                could access the funds. 4

                Additionally, OPE required schools to report on their use of HEERF grant funds quarterly
                and annually. OPE developed a HEERF annual report collection form for the first year
                following enactment of the CARES Act (2020 annual report collection form) and
                subsequently updated the collection form for the 2021 annual report. As discussed later
                in the HEERF Reports section of the finding, the quarterly and annual HEERF reports
                contain certain information on uses of funds that could be useful to OPE for
                performance monitoring and to help gauge program effectiveness. Lastly, OPE took
                steps to expand independent audit coverage for schools by providing feedback to OIG’s
                Non-Federal Audit Team on the design of the compliance audit guide for proprietary
                schools with HEERF grants5 and identifying the Education Stabilization Fund (which
                includes the HEERF program) as high-risk. Proprietary schools that expended
                $500,000 or more in total HEERF grant funds in a fiscal year or were on any HCM status
                (HCM1 or HCM2) at any point during the fiscal year in which HEERF grant funds were
                expended had to submit a compliance audit covering the school’s administration of the
                entire HEERF grant program, with the first reports due in July 2021. The high-risk
                designation ensured that the HEERF program would be covered by the compliance
                review portion of the FY 2021 Single Audits that independent auditors conduct for
                public and nonprofit schools.6




4
  The Department's Federal Student Aid can place schools with financial or compliance issues on a HCM
payment method (HCM1 or HCM2) to provide additional oversight of funds. HCM1 is less restrictive in
that the school can still draw down Federal funds in the same way as a school with no restrictions
(advance payment method), if certain criteria are met. Under HCM2, a school cannot receive Federal
funds under the advance payment method. It must first make disbursements to students using its own
funds and then submit a Reimbursement Payment Request to the Department to obtain Federal funds
for those disbursements (reimbursement payment method).
5
  OIG’s Guide for Compliance Attestation Engagements of Proprietary Schools Expending HEERF Grants,
issued March 31, 2021.
6
  The Single Audit Act, as amended, establishes requirements for audits of States, local governments,
Indian tribes, schools, and nonprofit organizations that expend a certain amount in Federal awards
during their fiscal year (currently set at $750,000). Single audits are performed by independent auditors
and encompass both financial and compliance components.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                       10
                  OPE Did Not Perform or Document Several Key Activities or
                  Establish Performance Metrics that are Essential to Effective
                  Program Oversight
                  OPE did not perform or document several key activities that are essential to effective
                  program oversight and required by the Department’s Guide for Managing Formula
                  Grant Programs. Specifically, although OPE’s ERU Director told us that OPE adhered to
                  the Department’s Guide, it did not:

                      •   develop a monitoring framework to guide its monitoring practices, procedures,
                          and controls;

                      •   conduct a risk assessment process covering the HEERF program and its recipient
                          schools and use information from that assessment to identify potential areas of
                          concern; or

                      •   design and implement a risk-based monitoring plan for the HEERF program to
                          provide assurance that HEERF grant funds are being used appropriately and
                          performance goals are being met.
                  A Federal awarding agency must have in place a framework for evaluating the risks
                  posed by applicants before they receive Federal awards. In evaluating risks posed by
                  applicants, the agency may use a risk-based approach and consider items such as
                  financial stability, management systems and standards, history of performance, audit
                  reports and findings, and ability to effectively implement requirements.7 An effective
                  monitoring framework, in part, should mitigate the most significant program risks
                  identified through a risk assessment designed to assess the program’s unique
                  requirements and recipients. A risk assessment should inform a program office’s key
                  control activities and other oversight, such as guidance, technical assistance, and
                  monitoring. While OPE performed limited risk assessment activities to inform certain
                  oversight processes, it did not maintain records demonstrating that it performed a
                  comprehensive assessment and analysis to identify and prioritize the most significant
                  HEERF program risks. OPE also did not have a monitoring plan or strategy for the HEERF
                  program to mitigate any significant risks identified through its regular program
                  administration activities. As a result, OPE was not well positioned to make strategic and
                  informed monitoring decisions for the HEERF program.

                  OPE did not take sufficient action with respect to performance monitoring, which is
                  essential to effective program oversight. OPE established a metric related to the




7
    Section 200.206(b) of 2 Code of Federal Regulations.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                         11
                  timeliness of its initial HEERF awards to schools.8 However, OPE did not otherwise
                  establish any clear performance goals for the HEERF program or specific metrics that
                  would provide a basis against which it could monitor individual schools’ performance or
                  report on outcomes at the program level. In April 2020, OMB stressed to Federal
                  agencies the importance of reviewing program performance.9 Eleven months later, in a
                  March 2021 memorandum, OMB informed Federal awarding agencies that performance
                  reporting should focus on intended program outcomes and maximize the use of a risk
                  management approach to emphasize the importance of program performance outcome
                  measures.10 This memorandum also instructed the agencies to collect recipient
                  performance reports in a manner that enables the Federal Government to articulate the
                  outcomes of Federal financial assistance to the public. Per Federal regulations, agencies
                  were also required to measure recipient performance to show achievement of program
                  goals and objectives, share lessons learned, improve program outcomes, and foster
                  adoption of promising practices.11

                  OPE Did Not Use Relevant and Available Information to Help
                  Guide Its Oversight and Monitoring Activities
                  OPE planned to rely on quarterly and annual HEERF reports and independent audits to
                  make information on schools’ uses of HEERF grant funds available for public
                  transparency and accountability purposes. The quarterly and annual HEERF reports
                  contain certain information on uses of funds that could be useful to OPE for
                  performance monitoring and to help gauge program effectiveness. Additionally, the
                  independent audits are an important tool for determining schools’ compliance with
                  program requirements, to include whether their uses of funds are allowable. However,
                  OPE did not have a process for compiling and assessing information from schools’ audits
                  and reports and needs to take additional actions to fulfill its oversight responsibilities by




8
 OPE’s metric was to make 100 percent of the HEERF grant funds available to schools within 30 days of
the CARES Act passage.
9
 OMB Memorandum M-20-21, “Implementation Guidance for Supplemental Funding Provided in
Response to the Coronavirus Disease 2019” (April 2020).
10
  OMB Memorandum M-21-20, “Promoting Public Trust in the Federal Government through Effective
Implementation of the American Rescue Plan Act and Stewardship of the Taxpayer Resources”
(March 2021).
11
     Sections 200.301 and 200.329 of 2 Code of Federal Regulations.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                            12
                using relevant and available information to improve its monitoring of school compliance
                and program performance.

                HEERF Reports
                OPE officials told us that the HEERF reports were primarily intended to provide
                transparency regarding schools’ use of HEERF grant funds. In November 2020, OPE
                posted on its website a spreadsheet that tracked whether schools had posted their
                quarterly HEERF reports on their websites. OPE told us that it took steps to ensure that
                nonreporting schools posted quarterly HEERF reports on their websites before they
                received supplemental HEERF funds. However, OPE did not provide documentation
                demonstrating that it continued to verify schools’ compliance with the quarterly HEERF
                reporting requirement or that it used information from the reports to guide its oversight
                and monitoring activities. Regarding the annual HEERF reports, according to OPE’s ERU
                Director, the Office of the Chief Data Officer was responsible for collecting and
                validating the data that schools included in these reports. The Department publishes
                data from these reports on its Education Stabilization Fund Transparency Portal.12

                The HEERF annual and quarterly reports contain information that OPE could use to
                assess risk and make key monitoring decisions. For example, the quarterly reports for
                the HEERF Institutional grants provide information on school spending in various
                categories, including how much schools spent on additional grants for students,
                reimbursements or discounts for tuition, additional technology for students, high-speed
                internet, off-campus housing, and food service. The quarterly reports for the HEERF
                Student Aid grants, in part, provide information on the amount that a school distributed
                to students, the number of students who received emergency grants, and the methods
                the school used to determine how much students would receive. The 2020 annual
                reports generally provided similar information but over a longer period.13

                As previously noted, OPE developed the HEERF 2020 annual report collection form and
                subsequently updated the collection form for the 2021 annual report. Both the
                2020 and 2021 annual report collection forms include information that OPE could use to
                guide its performance monitoring activities. For example, both forms require schools to
                report on students’ enrollment status after receiving HEERF grant funds, employee


12
   According to the website for the Department’s Education Stabilization Fund Transparency Portal
(https://covid-relief-data.ed.gov/), its purpose is to provide a view into how Education Stabilization Fund
(including HEERF) funds are spent by tracking, collecting, and disseminating data.
13
  Schools are required to post the quarterly reports on their primary website and submit their annual
reports to the Department.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                        13
                   staffing levels before and during the coronavirus pandemic, and how the schools used
                   the HEERF grant funds to advance the efforts of the HEERF program, such as by
                   providing tuition discounts, laptops, high-speed internet, or additional emergency
                   financial aid grants to students. OPE’s 2021 annual report collection form went a step
                   further by requiring schools to provide additional information on outcomes, including
                   how the HEERF grant funds have helped schools remain open and students stay in
                   school, and whether the HEERF grant funds have enabled the schools to keep student
                   prices14 and staff salaries comparable to pre-pandemic levels. This information, along
                   with the expenditure data included on both collection forms, could be useful to OPE for
                   performance monitoring and to help gauge program effectiveness. During a meeting
                   with OPE following the exit conference, OPE’s Chief of Staff told us that OPE plans to use
                   the information collected in the schools’ annual reports to help guide its HEERF
                   oversight activities going forward.

                   Independent Audit Reports
                   OPE’s reliance on independent audit reports without establishing a risk-based plan to
                   guide its monitoring activities is not sufficient to ensure that schools use HEERF grant
                   funds appropriately and meet performance goals. OPE has not developed or
                   implemented a process for assessing risk that uses audit report findings to identify
                   schools and compliance areas needing additional oversight or otherwise guide its
                   monitoring activities. The Department’s Risk Management Services Division (RMSD), in
                   coordination with OGC, was primarily responsible for resolving findings in the
                   independent audit reports.15 OPE could have used information from the audit reports to
                   help guide its oversight and monitoring activities, but instead relied on independent
                   auditors to monitor schools’ use of HEERF grant funds.

                   Independent audits can be effective tools to improve the integrity and effectiveness of
                   Department programs and help reassure the taxpayers, Congress, and other
                   stakeholders that Federal funds are being used appropriately. Schools’ audit reports,
                   when used in conjunction with other monitoring tools and as part of a larger monitoring
                   framework, help ensure proper oversight of Federal grant programs, generally, and of
                   the coronavirus-related programs (including HEERF), specifically. However, they should


14
     Price refers to costs covered by students and their families.
15
   RMSD is responsible for reviewing and following up on the resolution of HEERF-related findings
presented in these audit reports. RMSD officials told us that they follow up on the resolution of audit
findings by reviewing subsequent audits to verify that the findings have been resolved. Prior to
August 2021, RMSD typically performed its audit resolution duties in concert with OGC. OPE participated
in audit resolution meetings with RMSD and OGC starting in August 2021.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                          14
               not be the only or main source of information guiding OPE’s monitoring and oversight
               activities because compliance audits are not designed to assess grantee performance. In
               addition, not all schools are subject to an independent audit and the reports are
               typically issued 6 or 9 months after a school’s fiscal year ends, resulting in an
               impediment for OPE to timely address noncompliance identified at schools. Additionally,
               OMB extended the deadline for public and private nonprofit schools to submit their
               FY 2020 and FY 2021 audit reports by 3 or 6 months, depending on the schools’ audit
               report due date.16 While the extension decreased the burden on schools, it negatively
               impacted the audit reports’ usefulness as an oversight and monitoring tool for the
               HEERF program because the information was even more dated than under normal
               reporting timeframes.

               OPE’s Challenges in Administering the HEERF Program and
               Resource Allocation Decisions
               Challenges encountered in grantee oversight can partly be attributed to increased
               workload and resource demands related to administering and monitoring a new
               program with a large number of grantees. As noted in the Introduction, OPE’s grant
               administration workload more than tripled from about 5,000 grants in FY 2019 to
               17,000 grants in FY 2020 with the addition of the HEERF grants. By the end of May 2021
               (about 14 months after the CARES Act was enacted), OPE had awarded $66 billion in
               HEERF funding—about 33 times more than the $2 billion it typically awards each year. In
               response to the increase in workload, existing OPE employees and an employee detailed
               to OPE from another Department office performed various HEERF-related tasks to help
               implement and administer the HEERF program. HEERF-related responsibilities were
               spread across OPE and many existing OPE employees had to supplement their normal
               grant workload with additional HEERF-related tasks. OPE’s Senior Advisor for ARP
               Implementation told us that these employees performed the supplemental HEERF-
               related work until OPE was able to establish a dedicated unit and acquire additional
               resources devoted entirely to HEERF administration and oversight.

               To help centralize its management and oversight of the HEERF program, OPE established
               the ERU in September 2020 (6 months after the CARES Act was enacted) and created
               new positions within the unit that were devoted entirely to HEERF administration and
               oversight. According to OPE officials, filling the newly created positions was a lengthy
               and challenging process for OPE. The ERU started with two employees in
               September 2020 and increased its size to nine employees by December 2020. It took



16
  Some audit reports covering HEERF activities only became available in September 2021, or about
18 months after the CARES Act program was enacted.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                    15
               about 9 months (June 2021) for OPE to fill most (26) of the 28 positions it had authority
               to fill. However, the ERU experienced some attrition shortly thereafter and had only
               19 (68 percent) of the 28 positions filled as of December 2021. OPE began assigning
               administrative and oversight responsibilities for the larger HEERF portfolio to the ERU in
               January 2021, with all responsibilities having been assigned to the ERU by
               August 2021.17 The unit performed various functions that included providing guidance
               and technical assistance to grantees, verifying the accuracy of grant-related information
               in the Department’s grants management system and in grant award notifications,
               extending the grant performance period for supplemental HEERF grants under CRRSAA
               and ARP, and reviewing the Department’s grants management system for purposes of
               identifying large cash drawdowns that might not comply with Federal cash management
               requirements.

               Given the challenges noted above, OPE chose to devote a large portion of its time and
               resources on its initial, primary goal of awarding and allocating HEERF grant funds to
               schools as quickly as possible. OPE also devoted significant time and resources to
               preparing several FAQ documents and conducting listening sessions and webinars,
               which were designed to address stakeholder feedback and help ensure that schools and
               other stakeholders understood the HEERF program requirements. However, because of
               the finite amount of available resources and other competing commitments, OPE did
               not develop HEERF-specific guidance that would require its program officials to perform
               necessary oversight activities. Instead, OPE generally relied on others (for example,
               independent auditors) to identify compliance issues involving the HEERF program.

               While it was important for OPE to allocate and award HEERF grant funds timely, it was
               also important for OPE to design and implement a risk-based monitoring plan to help
               ensure that schools use those funds appropriately and meet performance goals. A risk-
               based approach to oversight is especially important when resources are limited. OPE
               should develop a monitoring plan that is risk-based and designed so that it focuses its
               attention and resources on the higher risk areas of the HEERF program and schools
               posing significant risk. Without a monitoring plan, it would be difficult for OPE to track
               schools’ compliance with HEERF and other Federal requirements, measure schools’
               progress in meeting performance standards, and identify schools that should receive
               additional oversight.




17
 For the first 4 months after its creation (September–December 2020), the ERU’s sole responsibility
was to implement the Institutional Resilience and Expanded Postsecondary Opportunity program, which
was a very small part of the larger HEERF program and not covered by our audit.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                        16
               During an October 2021 audit briefing that we held with OPE and Department officials,
               OPE’s Acting Assistant Secretary told us that OPE’s administration of the HEERF program
               has been in a state of continuous improvement and that OPE had begun documenting
               its assessment of risk. Following the briefing, OPE provided us with a document titled
               “HEERF Risk Mitigation and Internal Controls” (created in Summer 2021). OPE told us
               that it updates this living document when new risk areas and actions to address those
               risks are identified. The document mentions monitoring of HEERF allocations to closing
               or merging schools, quarterly and annual reporting, and compliance reviews through
               external audits. However, it does not describe in any detail OPE’s procedures for
               monitoring these schools or others that may merit review, or for reviewing and using
               information contained in schools’ quarterly and annual HEERF reports and external audit
               reports to inform its monitoring efforts.

               Without Effective Oversight Processes, OPE Might Not Identify
               or Become Aware of Significant HEERF Compliance or
               Performance Issues
               Without effective oversight processes, there is an increased risk that OPE will not
               identify or become aware of significant compliance or performance issues involving the
               $76 billion HEERF program provided to more than 4,900 schools. Schools’ misuse or
               mismanagement of HEERF grant funds reduces the funds available for students who
               need them. Additionally, OPE’s limited efforts around performance management affect
               its ability to describe in clear and quantifiable terms the overall impact of the HEERF
               program, which is critical to demonstrating to the public how this large investment of
               public funds has been used and also could help inform oversight and deliberations with
               Congress concerning future emergency funding. Lastly, because OPE has not performed
               or documented several key activities, it may not have the information that it needs to
               make informed and strategic decisions concerning staffing levels and other resources
               that are necessary to ensure effective program oversight.

               In prior audits, we have identified and reported on the need to enhance schools’
               compliance with HEERF and other Federal requirements.18 We issued two HEERF school
               audit reports that identified noncompliance related to the schools’ use of funds (schools
               used funds for unallowable costs or to pay for services that extended beyond the grant
               performance period) and cash management (schools drew funds early and did not



18
  Remington College’s Use of HEERF Student Aid and Institutional Grants (ED-OIG/A20CA0017), issued
September 2021; Lincoln College of Technology’s Use of HEERF Student Aid and Institutional Grants
(ED-OIG/A20CA0016), issued September 2021; and Risk of Closed Institutions of Higher Education
Receiving Higher Education Emergency Relief Fund Grants (ED-OIG/I21SIU00841), issued May 13, 2021.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                     17
              maintain them in interest-bearing accounts). We issued another report that identified
              over $1.2 million in HEERF grant funds that were awarded to and drawn down by closed
              schools. These reported findings further support the need for OPE to establish and
              implement effective oversight processes.

              During a January 2022 meeting that we held with OPE, the Director of the ERU told us
              that OPE’s plans for monitoring the HEERF program are evolving and that OPE plans to
              use the OPE Monitoring and Compliance Plan (2016) as a guide when considering its
              future monitoring efforts. The plan lists several monitoring activities, including risk
              assessment of grantees, onsite or desk reviews to ensure that schools make adequate
              progress toward achieving the grant’s performance objectives and use Federal funds
              appropriately, and technical assistance workshops for schools. If used, this plan (in
              conjunction with the Department’s Guide for Managing Formula Grant Programs) could
              help OPE address some of the issues identified in this finding. As of the end of our
              fieldwork, OPE had not used this plan to help guide its monitoring and oversight
              activities for the HEERF program. We urge OPE to finalize its monitoring plans as soon as
              possible given that the HEERF program has already been operational for about 2 years
              and many of the activities described in this finding should be performed early in
              program implementation.

              Supplemental Guidance and Requirements
              The Government Accountability Office’s Standards for Internal Control in the Federal
              Government (Green Book) (September 2014) can be used to help design, implement,
              and operate internal controls to achieve an entity’s objectives related to operations,
              reporting, and compliance.

              o   Sections 3.09 through 3.11 of the Green Book states that management should
                  develop and maintain documentation of its internal control system. Effective
                  documentation assists in management’s design of internal control by establishing
                  and communicating the who, what, where, and why of control execution to
                  personnel. Documentation also provides a means to retain organizational
                  knowledge, mitigate the risk of having that knowledge limited to a few personnel,
                  and communicate that knowledge as needed to external parties, such as external
                  auditors. Management documents internal control to meet operational needs.
                  Documentation of internal control is evidence that controls are identified, capable
                  of being communicated to those responsible for their performance, and capable of
                  being monitored and evaluated by the entity.

              o   Principle 6 states that management should define objectives clearly to enable the
                  identification of risks and define risk tolerances (section 6.01). In addition,
                  management defines objectives in specific and measurable terms to enable the


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                       18
                  design of internal control for related risks (section 6.02), and in measurable terms so
                  that performance toward achieving those objectives can be assessed (section 6.04).

              o   Principle 7 states that management should identify, analyze, and respond to risks
                  related to achieving the defined objectives (section 7.01).

              o   Principle 10 states that management should design control activities to achieve
                  objectives and respond to risks. In addition, management should establish activities
                  to monitor performance measures and indicators (Section 10.03)
              o   Principle 12 states that management should implement control activities through
                  policies.
              In addition, the Government Accountability Office’s Internal Control Management and
              Evaluation Tool (August 2001) was established to assist agencies in maintaining or
              implementing effective internal control. Section 6 of the Tool suggests that agencies
              consider performance measures and indicators that have been established throughout
              the organization at the entity wide, activity, and individual level. In addition,
              performance measurement assessment factors are evaluated to ensure they are linked
              to mission, goals, and objectives.

              Recommendations
              We recommend that the Assistant Secretary for OPE—

                  1.1 Develop guidance containing key steps for OPE staff to follow in the event that
                      they are tasked with implementing emergency programs when experiencing
                      resource and time constraints.
                  1.2 Develop a monitoring framework for the HEERF program that uses a risk
                      assessment process to identify and prioritize significant program risks, and
                      design and implement a risk-based monitoring plan and associated key control
                      activities. The plan should ensure that OPE focuses its monitoring efforts and
                      targets its resources on schools and areas identified as posing higher risks of
                      noncompliance with program requirements, including those related to uses of
                      funds, and on performance outcomes established in alignment with HEERF
                      program objectives, which OPE must also ensure are clearly defined and
                      assessed on an ongoing basis.

              OPE Comments
              While OPE did not state whether it agreed or disagreed with the finding, it stated that
              the finding and recommendations did not sufficiently recognize the challenges it faced
              when administering the HEERF program and making improvements on a continuous



U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                      19
              basis. OPE partially agreed with both of our recommendations and described some of
              the actions it has taken or will take in response to our recommendations.

              For Recommendation 1.1, OPE stated that it would develop additional guidance with
              key steps for OPE staff to follow if they are tasked with implementing emergency
              programs in the future. OPE also said that it would explore opportunities to work with
              other offices.

              OPE partially agreed with Recommendation 1.2, stating that it is appropriate to develop
              a monitoring framework for the HEERF program that uses a risk assessment process to
              identify and prioritize significant program risks. OPE stated that it has done this over the
              course of the HEERF program and described some of its monitoring efforts, which it said
              are continuously improving. OPE also said that it planned to use the OPE Monitoring and
              Compliance Plan, in conjunction with a HEERF Monitoring Plan, to guide its monitoring
              efforts. The HEERF Monitoring Plan was drafted in October 2021 and is currently being
              implemented. Additionally, OPE described some of the challenges it faced, including its
              awarding of 30,000 grants across 3 pieces of legislation while simultaneously developing
              the HEERF program and navigating the national emergency with limited staff and
              resources. Lastly, OPE noted that it worked to implement as many processes as it
              practicably could, given the need to quickly distribute grant funds to schools to address
              the national emergency.

              OIG Response
              With the exception of OPE describing an additional requirement for schools that were
              closing or on HCM2, OPE generally did not provide additional information on its past
              monitoring and oversight efforts beyond what was already covered in the draft report.
              We disagree with OPE’s suggestion that our report does not sufficiently recognize the
              challenging circumstances under which it was operating when implementing the HEERF
              program and its evolving oversight efforts. This report acknowledges and describes the
              challenges that OPE faced and the actions taken to promote transparency and
              accountability for the HEERF program, while also making some recommendations for
              improvement.

              Regarding Recommendation 1.1, OPE’s proposed action to develop additional guidance
              containing key steps for OPE staff to follow if they are tasked with implementing
              emergency programs in the future, if implemented as described, is responsive to this
              recommendation.

              Regarding Recommendation 1.2, we do not agree that OPE had a monitoring framework
              in place over the course of the HEERF program. As noted in the finding, OPE did not
              perform or document several key activities (such as developing a monitoring
              framework, conducting a risk assessment, and designing and implementing a risk-based


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                       20
              monitoring plan) that are essential to effective program oversight and required by the
              Department’s Guide for Managing Formula Grant Programs that OPE purported to
              follow. While we acknowledge that OPE’s plans to use the OPE Monitoring and
              Compliance Plan and HEERF Monitoring Plan to guide its monitoring efforts could
              address some of the issues identified in the finding, OPE had not used either plan as a
              guide as of the end of our audit fieldwork. OPE’s original plan to follow the
              Department’s Guide for Managing Formula Grant Programs, in conjunction with its
              proposed action to use the OPE Monitoring and Compliance Plan and HEERF Monitoring
              Plan, would be responsive to our recommendation if OPE addresses the missing key
              monitoring actions it has yet to implement.

              We did not revise the finding or recommendations in response to OPE’s comments. We
              did, however, add another step that OPE took to promote transparency and
              accountability for the HEERF program.




U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                   21
                  Appendix A. Scope and Methodology
                  Our audit covered OPE’s processes (oversight and monitoring activities) for ensuring
                  that schools used HEERF grant funds appropriately and related performance goals were
                  met from March 2020, when the CARES Act was enacted, through February 2022. It also
                  included related activities performed by other Department offices, including OGC; the
                  Office of the Chief Data Officer within OPEPD; and the Office of Budget Service and
                  RMSD within OFO.19 These activities included developing grant funding allocation tables
                  for schools, developing and overseeing the HEERF annual reporting data collection
                  forms, resolving HEERF-related external audit findings, and coordinating the approval of
                  HEERF-related products (for example, FAQ documents) through OMB.

                  To achieve our objective, we first gained an understanding of the following laws,
                  regulations, guidance, and reports relevant to OPE’s processes for ensuring that
                  grantees used HEERF grants funds appropriately and related performance goals were
                  met:

                      •   section 18004 of the CARES Act, “Higher Education Emergency Relief Fund”;
                      •   section 314 of the CRRSAA, “Higher Education Emergency Relief Fund”;
                      •   section 2003 of the ARP, “Higher Education Emergency Relief Fund”;
                      •   2 Code of Federal Regulations Part 200, Uniform Administrative Requirements,
                          Cost Principles, and Audit Requirements for Federal Awards, section 200.205
                          (version 2020) and section 200.206 (version 2021), “Federal awarding agency
                          review of risk posed by applicants”;
                      •   OMB M-20-21, “Implementation Guidance for Supplemental Funding Provided
                          in Response to the Coronavirus Disease 2019” (April 2020);
                      •   OMB M-21-20, “Promoting Public Trust in the Federal Government through
                          Effective Implementation of the American Rescue Plan Act and Stewardship of
                          the Taxpayer Resources” (March 2021);
                      •   OMB Circular A-11, “Preparation, Submission, and Execution of the Budget”
                          (December 2019), Part 6, sections 200 and 230;

                      •   OMB Circular A-123, “Management’s Responsibility for Enterprise Risk
                          Management and Internal Control” (July 2016);

                      •   Government Accountability Office, Standards for Internal Control in the Federal
                          Government (September 2014);



19
     In January 2022, the Office of Budget Service moved from OFO to OPEPD.


U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                       22
                  •   the Department’s Guide for Managing Formula Grant Programs (August 2019);
                      and
                  •   the Department’s FY 2020 Annual Performance Report and FY 2022 Annual
                      Performance Plan.
              We then gained an understanding of OPE’s oversight and monitoring activities through
              interviews. We interviewed employees, officials, or both, from OPE, OGC, OPEPD, and
              OFO who had a significant role in establishing, administering, or monitoring the HEERF
              program. To assess the reliability of the testimonial evidence, we compared information
              obtained through interviews with records related to OPE’s oversight and monitoring
              activities when provided by the interviewees. We concluded that the testimonial
              evidence we obtained was sufficiently reliable within the context of our audit objective.

              Next, we reviewed documents and records. We reviewed OPE guidance and technical
              assistance documents covering the schools’ application for, use of, and reporting on
              HEERF grant funds; Recipient Funding Certification and Agreement forms; and sample
              letters that OPE sent to schools describing how they could access their HEERF grant
              funds and how they should report their use of those funds. We also reviewed
              documents identifying the Department offices and staff who had a role in establishing,
              administering, or monitoring the HEERF program; OPE’s first annual data collection on
              schools’ use of HEERF grant funds from March 13, 2020, through December 31, 2020,
              and its updated annual data collection form that will be used for 2021 and beyond; and
              the Department’s FY 2020 Annual Performance Report and FY 2022 Performance Plan.
              The purpose of this review was to gain an understanding of how OPE administered and
              monitored HEERF grant funds and established and tracked HEERF performance goals.

              We then obtained an understanding of all five areas of internal control (control
              environment, risk assessment, control activities, information and communication, and
              monitoring) relevant to OPE’s oversight and monitoring activities for the HEERF
              program. While all five areas of internal control are important, we concluded that the
              following areas and principles of internal control were significant to our audit objective.

                  •   Control environment—oversight structure, oversight for the internal control
                      system, assignment of responsibility and delegation of authority, and
                      documentation of OPE’s and the Department’s internal control system.

                  •   Risk assessment—risk identification, analysis of risk, responses to risk, including
                      consideration of the potential for fraud.
                  •   Control activities—design of appropriate types of control activities, design of
                      control activities at various levels, documentation of responsibilities through
                      policies, and periodic review of control activities.



U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                        23
              As discussed in our finding, we identified weaknesses in OPE’s HEERF oversight
              processes, particularly with respect to its risk assessment and control activities.

              Compliance with Standards
              We conducted this performance audit in accordance with generally accepted
              government auditing standards. Those standards require that we plan and perform the
              audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
              findings and conclusions based on our audit objective. We believe that the evidence
              obtained provides a reasonable basis for our finding and conclusions based on our audit
              objective.

              We remotely conducted our audit from May 2021 through February 2022. We discussed
              the results of our audit with OPE and other Department officials on December 17, 2021,
              and provided them with a draft of this report on March 29, 2022.




U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                                    24
              Appendix B. Acronyms and Abbreviations
                ARP            American Rescue Plan

                CARES Act      Coronavirus Aid, Relief, and Economic Security Act

                CRRSAA         Coronavirus Response and Relief Supplemental
                               Appropriations Act

                Department     U.S. Department of Education

                ERU            Emergency Response Unit

                FAQ            Frequently Asked Questions

                FY             fiscal year

                Green Book     The Standards for Internal Control in the Federal
                               Government

                HCM            Heightened Cash Monitoring

                HEERF          Higher Education Emergency Relief Fund

                OESE           Office of Elementary and Secondary Education

                OFO            Office of Finance and Operations

                OGC            Office of the General Counsel

                OMB            Office of Management and Budget

                OPE            Office of Postsecondary Education

                OPEPD          Office of Planning, Evaluation and Policy Development

                OUS            Office of the Under Secretary

                RMSD           Risk Management Services Division

                schools        institutions of higher education




U.S. Department of Education
Office of Inspector General
ED-OIG/A20CA0029                                                                       25
                               OPE Comments




U.S. Department of Education
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ED-OIG/A20CA0029                              26
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