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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.
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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.
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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
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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
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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.
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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.
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• 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.
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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.
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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
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OPE Comments
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