University of Cincinnati's Use of Higher Education Emergency Relief Fund Student Aid and Institutional Grants (ED-OIG/A20US0045)
Summary
Final audit report ED-OIG/A20US0045 of the U.S. Department of Education Office of Inspector General, dated January 17, 2023, addressed to Dr. Neville Pinto, President of the University of Cincinnati, on the University's use of Higher Education Emergency Relief Fund (HEERF) Student Aid and Institutional grants. It reports that the University spent $109.9 million (83 percent) of its total HEERF allocation of $132.8 million as of September 30, 2021, and generally used the funds for allowable and intended purposes. It reports that the University overstated the lost revenue charged to its Institutional grant by $797,965, did not fully comply with requirements for $1,916,041 (3 percent) of its noncompetitive procurements, and did not fully comply with cash management requirements. The University agreed with all recommendations except Recommendation 3.2.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
- Issuer
- U.S. Department of Education, Office of Inspector General
- Document type
- Report
- Date
- 2023-01-17
Cite this document
“University of Cincinnati's Use of Higher Education Emergency Relief Fund Student Aid and Institutional Grants (ED-OIG/A20US0045).”
U.S. Department of Education, Office of Inspector General, dated 2023-01-17. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/university-cincinnati-heerf/
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U.S. Department of Education
Office of Inspector General
University of Cincinnati’s
Use of Higher Education
Emergency Relief Fund
Student Aid and
Institutional Grants
January 17, 2023
ED-OIG/A20US0045
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
January 17, 2023
Dr. Neville Pinto, President
University of Cincinnati
2600 Clifton Avenue
Cincinnati, OH 45221
Dear Dr. Pinto:
Enclosed is our final audit report, “University of Cincinnati’s Use of Higher Education Emergency Relief
Fund Student Aid and Institutional Grants,” Control Number ED-OIG/A20US0045. This report
incorporates the comments you provided in response to the draft report. If you have any additional
comments or information that you believe may have a bearing on the resolution of this audit, you
should send them directly to the following Department of Education official, who will consider them
before taking final Departmental action on this audit:
Dr. Nasser Paydar
Assistant Secretary
U.S. Department of Education
400 Maryland Avenue, S.W.
Washington, D.C. 20202
The U.S. Department of Education’s policy is to expedite audit resolution by timely acting on findings
and recommendations. Therefore, if you have additional comments, we would appreciate receiving
them within 30 days.
Sincerely,
/s/
Daniel P. Schultz
Director of Pandemic Relief Audits
Enclosure
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 1. University of Cincinnati Generally Used Student Aid Grant Funds for Allowable
and Intended Purposes but Needs to Strengthen its Review and Documentation
Processes .......................................................................................................................... 11
Finding 2. University of Cincinnati Generally Used Institutional Grant Funds for Allowable
and Intended Purposes but Needs to Strengthen Certain Processes to Ensure
Compliance with Grant Requirements ............................................................................. 23
Finding 3. University of Cincinnati Did Not Fully Comply with Federal Cash Management
Requirements.................................................................................................................... 31
Finding 4. University of Cincinnati’s HEERF Quarterly Reporting Was Not Always
Accurate and Publicly Available ........................................................................................ 37
Appendix A. Scope and Methodology............................................................................... 41
Appendix B. Acronyms and Abbreviations........................................................................ 53
University of Cincinnati Comments .................................................................................. 54
Results in Brief
What We Did
Our objective was to determine whether the University of Cincinnati (University) used
the Student Aid (Assistance Listing Number (ALN) 84.425E) and Institutional
(ALN 84.425F) portions of its Higher Education Emergency Relief Fund (HEERF) funds for
allowable and intended purposes. We also reviewed the University’s cash management
practices and the timeliness and quality of the data the University reported on its use of
HEERF funds. 1 Our audit covered the University’s HEERF expenditures, cash flows, and
reporting under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act),
Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), and
American Rescue Plan (ARP), from March 13, 2020, through September 30, 2021.
To achieve our audit objective, we interviewed University officials who were responsible
for drawing down, managing, awarding, spending, and reporting on the University of
Cincinnati’s HEERF grant funds. We also reviewed the University’s policies, procedures,
and other supporting documentation (for example, bank records, invoices, student
records) for managing, authorizing, and accounting for HEERF-related transactions and
expenditures. Additionally, we reviewed a sample of Student Aid grant distributions and
Institutional grant expenditures to determine whether the University used the Student
Aid and Institutional portions of its HEERF funds for allowable and intended purposes.
Further, we compared the timing and amounts of drawdowns of HEERF funds with the
University ’s accounting records (expenditure information) to determine whether the
University minimized the time between drawdown and disbursement of the funds.
Lastly, we reviewed the reports that the University posted on its website covering its
use of HEERF funds for the quarterly periods that ended September 30, 2020, through
September 30, 2021; and its first annual performance report covering HEERF grant
activities under the CARES Act from March 13, 2020, through December 31, 2020.
What We Found
The University spent $109.9 million (83 percent) of its total HEERF allocation of
$132.8 million as of September 30, 2021. The University generally used the Student Aid
($42.1 million) and Institutional ($67.8 million) portions of its HEERF grant funds for
allowable and intended purposes but needs to strengthen its review and documentation
processes for its use of Student Aid grant funds and certain other processes to ensure
1
In this document, “HEERF” generally refers to both the Student Aid and Institutional grant funds. We
use “Student Aid” and “Institutional” when the information is specific to the respective grant.
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compliance for its use of Institutional grant funds. We also found that the University did
not fully comply with cash management and reporting requirements.
The University needs to strengthen these processes because it
• did not have an effective review process to detect or prevent payment errors
for a small number of students who applied for emergency financial aid grants
under the CARES Act;
• did not fully document its Student Aid award determinations, eligibility criteria,
and related management decisions;
• overstated the amount of lost revenue charged to its Institutional grant by
$797,965 (1 percent of total Institutional grant expenditures) due to improper
revenue recognition and inclusion of a duplicate charge, and did not fully
comply with Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards for $1,916,041 (3 percent) of its
noncompetitive procurements;
• did not minimize the time between drawing down and disbursing CARES Act
Student Aid grant funds, and remitted imputed interest based on $1,450 in
estimated earnings rather than remitting the $36,889 in earnings based on the
pool of accounts average rate of return allocable to CARES Act Student Aid grant
funds’ balances;
• reported $4.1 million of scholarships awarded to students in the wrong
expenditure category and did not post all required HEERF quarterly reports on
its public website.
We also determined that the information in the University’s first HEERF annual
performance report was generally accurate, complete, and timely. After we discussed
our audit results with University officials, they informed us that they repurposed the
$797,965 we questioned for other expenditures that were charged to the Institutional
grant in June 2022. We did not review these expenditures. If the repurposed
expenditures are allowable and supported, this would be an acceptable remedy to our
finding. The University also revised its quarterly HEERF Institutional expenditure report
to properly identify the $4.1 million as scholarships rather than emergency financial aid
grants to students and posted missing reports to its website.
What We Recommend
We provide detailed recommendations addressed to the Assistant Secretary for the
Office of Postsecondary Education in each finding section in this report.
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In summary, we recommend that the Assistant Secretary for the Office of Postsecondary
Education—
• Require the University to develop and implement a review process to prevent or
detect payment errors when awarding emergency financial aid grants to
students, and to develop and implement policies and procedures to ensure that
its award determinations, eligibility criteria, and management decisions related
to eligibility for its emergency financial aid grants to students are adequately
documented and supported at the time award decisions are made.
• Require the University to carefully document how its CRRSAA and ARP student
aid eligibility criteria prioritized and continue to prioritize students with
exceptional need.
• Review the allowability of the repurposed Institutional expenditures and the
reasonableness of the noncompetitive procurements, and if unallowable or
inappropriate, require the University to either return to the Department or
reallocate for allowable expenditures the unsupported costs charged to the
grant of $797,965 in lost revenue and $1,916,041 in noncompetitive
procurements.
• Require the University to develop and implement policies and procedures to
ensure that (1) calculations for charging lost revenue to its HEERF Institutional
grant are reviewed for accuracy and consistency with its financial reporting
policies and procedures, (2) procurements charged to the grant comply with
Federal and University requirements, and (3) expenditures in its quarterly
HEERF Institutional expenditure reports are accurate and reported properly.
• Require the University to incorporate in its policies and procedures certain
Federal cash management requirements, and to remit $35,439 in earnings
($36,889 minus the $1,450 in imputed interest) on the advance of the CARES Act
Student Aid grant funds.
University of Cincinnati Comments and Our Response
We provided a draft of this report to the University for comment. We summarize the
University’s comments at the end of each finding and provide the full text of the
comments at the end of the report (see “University of Cincinnati Comments”).
University Comments
In its response to our draft report, the University did not state whether it agreed or
disagreed with the findings, but agreed with all recommendations, except for
Recommendation 3.2. The University described its specific plans for developing and
implementing written policies and procedures consistent with applicable program
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requirements and other corrective actions as specified by our recommendations. The
University did not agree with Recommendation 3.2 requiring it to remit $35,439 in
earnings on the advance of CARES Act Student Aid grant funds. In its response, the
University stated that the funds were invested in a secure money market fund, which
was not earning the long-term rate that the $35,439 calculation is based on.
Office of Inspector General Response
The University’s proposed corrective actions, if effectively implemented, are generally
responsive to our recommendations, with the exception of Recommendation 3.2. As
summarized at the end of the findings, for a few of our recommendations, the
University either did not specify any corrective actions or proposed corrective actions
that were only partially responsive to the recommendations. It will be important for the
University to work with the Department to ensure that all recommendations are
appropriately and sufficiently resolved and that corrective actions are fully
implemented.
We disagree with the University’s statement that the funds were invested in a secure
money market fund in its response to Recommendation 3.2. We acknowledge that the
University’s Temporary Investment Pool (TIP) the funds were deposited in included a
money market fund among many other investment options. However, the University did
not provide sufficient evidence to demonstrate that the funds were deposited into this
specific money market fund within the TIP. Instead, the funds were commingled with
other Federal and non-Federal funds held in the TIP. Therefore, we did not change our
recommendation.
We did not make any changes to the findings or recommendations based on the
University’s comments.
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Introduction
On March 13, 2020, the President declared a national emergency due to the
coronavirus. In response, Congress passed three coronavirus relief acts within a 1-year
period that included Higher Education Emergency Relief Funds.
• The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on
March 27, 2020 (Public Law 116-136), provided about $14 billion for the Higher
Education Emergency Relief Fund (HEERF) program to mitigate the impact of the
coronavirus on students and schools.
• The Coronavirus Response and Relief Supplemental Appropriations Act
(CRRSAA) was signed into law on December 27, 2020 (Public Law 116-260),
authorizing an additional $22.7 billion for the HEERF program.
• The American Rescue Plan (ARP) was signed into law on March 11, 2021 (Public
Law 117-2), authorizing $39.6 billion in additional HEERF funding.
These HEERF funds were to be used to defray expenses associated with the coronavirus,
carry out student support activities, and provide emergency financial aid grants to
students.
Collectively, more than $76 billion was provided for the HEERF program through the
CARES Act, CRRSAA, and ARP. The U.S. Department of Education’s (Department) Office
of Postsecondary Education is responsible for administering and overseeing the HEERF
grants, which were awarded to more than 4,500 schools.
HEERF Program
The HEERF program provides direct grants to schools to prevent, prepare for, and
respond to the coronavirus. 2 The Department divided the primary HEERF funding stream
between two subprograms—the Student Aid portion under Assistance Listing Number
(ALN) 84.425E, and the Institutional portion under ALN 84.425F. 3 Schools had to use the
2
The CARES Act, CRRSAA, and ARP each authorized about 90 percent of the HEERF funds for direct
grants to schools, based on a statutory formula. The remaining funds were for other formula grants to
schools to address needs directly related to coronavirus and for schools that the Department
determined had the greatest unmet needs related to the coronavirus.
3
The Department also awarded the University of Cincinnati a $928,302 grant from another HEERF
funding stream under the Strengthening Institutions Program (ALN 84.425M), which we did not review.
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Student Aid portion only for emergency financial aid grants to students and could use
some or all of the Institutional portion for emergency financial aid grants to students.
The Student Aid and Institutional portions of HEERF funding are subject to Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance) in 2 Code of Federal Regulations (C.F.R.) part 200. The
Uniform Guidance also addresses cash management requirements.
CARES Act
For the direct grants, the CARES Act required schools to distribute at least 50 percent of
their HEERF funds 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 to students, or to
cover any costs associated with significant changes to the delivery of instruction due to
the coronavirus.
In April 2020, the Department allocated the HEERF funds as two separate grants—
50 percent of each school’s total authorization for emergency financial aid grants to
students (Student Aid portion), and 50 percent for institutional costs (Institutional
portion). In addition to submitting an application, the Department required schools to
sign separate certification and agreement forms to access their Student Aid and
Institutional grant funds. The Department also required schools to report publicly on
their use of HEERF funds by posting the required information on the school’s primary
website each quarter and to submit their first HEERF annual performance report
(covering their use of CARES Act funding from March 13, 2020, through December 31,
2020) to the Department by February 8, 2021.
CRRSAA and ARP
CRRSAA and ARP provided supplemental funding for existing private nonprofit and
public HEERF grantees. 4 Under these acts, Congress expanded the allowable uses of
grant funds under section 314(a)(1) of CRRSAA and section 2003(1) of ARP for unspent
HEERF funds. Unlike the CARES Act, CRRSAA and ARP provide that students exclusively
4
CRRSAA created a separate program for proprietary schools, which continued under ARP, that only
supports emergency financial aid grants to students. The Department generally distributed CRRSAA and
ARP funding as supplements to existing CARES Act grant awards, which did not require the school to
submit another application. Schools that did not receive HEERF funding under the CARES Act were
subject to the application process to receive CRRSAA funding. Schools that did not receive HEERF
funding under the CARES Act or CRRSAA were subject to the application process to receive ARP funding.
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enrolled in distance education may receive emergency financial aid grants. Further,
CRRSAA and ARP require schools to prioritize students with exceptional need when
awarding emergency financial aid grants to students.
CRRSAA and ARP also expanded the allowable uses of Institutional grant funds to
include defraying expenses associated with the coronavirus such as lost revenue,
reimbursement for expenses already incurred, technology costs associated with a
transition to distance education, faculty and staff trainings, and payroll. The two acts
also allow schools to use Institutional grant funds to provide student support activities
authorized by the Higher Education Act of 1965 (HEA) that address needs related to the
coronavirus. Additionally, section 2003(5) of ARP provides that schools that do not use
the Institutional portion of their ARP grant funds entirely for emergency financial aid
grants to students must use a portion of these funds to implement evidence-based
practices to monitor and suppress the coronavirus according to public health guidelines
and conduct direct outreach to financial aid applicants about the opportunity to receive
a financial aid adjustment due to the recent unemployment of a family member or
independent student, or other circumstances, as described in section 479A of the HEA.
In January 2021, the Department allocated CRRSAA HEERF funds to schools by
establishing the minimum amount of funding available for emergency financial aid
grants to students (Student Aid portion) as the amounts provided by the CARES Act
HEERF allocation and establishing the maximum amount schools could use for
institutional costs (Institutional portion) as the remaining amount of the total award. In
May 2021, the Department allocated ARP HEERF funds to schools in amounts such that
at least half of a school’s total award was to be used to make emergency financial aid
grants to students (Student Aid portion) and the remainder could be used for
institutional purposes (Institutional portion).
Under CRRSAA and ARP, schools were required to continue reporting publicly on their
use of HEERF funds by posting the required information on the school’s primary website
each quarter. Additionally, the Department required schools to submit a second annual
performance report by May 6, 2022, covering their use of HEERF funds under the CARES
Act, CRRSAA, and ARP from January 1, 2021, through December 31, 2021. The
Department will also require schools to submit a third annual performance report
covering January 1, 2022, through December 31, 2022.
University of Cincinnati
The University of Cincinnati (University) is a public research university with its main
campus located in Cincinnati and satellite campuses located in Blue Ash and Clermont,
Ohio. The University’s fiscal year 2022 operating budget was $1.6 billion and, as of
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June 30, 2021, its endowment was $1.8 billion. The University has 14 colleges and offers
more than 400 degree programs in a variety of disciplines, including medicine, nursing,
business, engineering, and law. About 48,000 students are enrolled at the University,
including students from all 50 States and more than 100 countries (international
students). About 85 percent of students are enrolled in on-campus classes and the other
15 percent are enrolled in online classes (distance education).
Various Federal agencies have awarded education and research grants and contracts to
the University in recent years. According to the University’s single audit report covering
fiscal year 2021, the University expended more than $538 million in Federal funding
from a variety of agencies including the Departments of Education, Defense, and Health
and Human Services, National Science Foundation, and National Institutes of Health.
The Department awarded the University of Cincinnati a total of $132.8 million in HEERF
funds (including $58.9 million for its Student Aid portion and $73.9 million for its
Institutional portion) under the CARES Act and as supplemental funds under CRRSAA
and ARP, as shown in Table 1 on the next page. The Department allowed the University
1 year to spend its CARES Act HEERF funding and, after CRRSAA and ARP were enacted,
extended the grant period by an additional 2 years. On April 4, 2022, the Department
automatically extended the grant period for all HEERF funds to June 30, 2023. 5
According to University officials, the University plans to spend all of its HEERF funding by
the end of June 2023. The University expended $109.9 million (83 percent) of its total
HEERF funds as of September 30, 2021, which includes all of its CARES Act
($23.5 million) and CRRSAA ($39.3 million) HEERF funds and $47.1 million of its ARP
HEERF funds.
Table 1. University of Cincinnati’s HEERF Funding
Student Aid Institutional
Funding Source Award Date Total Award Portion Portion
(ALN 84.425E) (ALN 84.425F)
April 2020
Student Aid
CARES Act $23.52 million $11.76 million $11.76 million
May 2020
Institutional
CRRSAA February 2021 $39.29 million $11.76 million $27.53 million
5
Schools are allowed to request a one-time extension of up to 1 year to spend HEERF funding, which
would extend the performance period for their HEERF grants through June 30, 2024.
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Student Aid Institutional
Funding Source Award Date Total Award Portion Portion
(ALN 84.425E) (ALN 84.425F)
ARP May 2021 $70.00 million $35.42 million $34.58 million
Total – $132.81 million $58.94 million $73.87 million
Source: Office of Inspector General (OIG) summary of the Department’s allocation tables and the
University of Cincinnati’s Grant Award Notification documents.
Impact of Coronavirus
On March 13, 2020, the University of Cincinnati announced that most on-campus classes
and operations would be curtailed or shut down for the remainder of the spring 2020
school term. According to University officials, the University’s robust distance education
capabilities enabled it to quickly transition on-campus classes to online instruction with
the existing faculty and staff. Students living in University housing were asked to return
home and by the end of March 2020, the University had closed its student housing and
dining facilities. 6 Essential campus operations, such as the library and administrative
offices, remained open. However, faculty and staff were given the option of working
remotely from home whenever possible to help mitigate the spread of the coronavirus.
Most campus activities began to return to normal by the fall 2020 school term when the
dorms reopened. However, many students did not return to on-campus housing until
August 2021 for the start of the new academic year. While the University’s revenue and
enrollment had been growing for several years prior to the coronavirus, the University
experienced declining revenue following the onset of the coronavirus—primarily due to
limiting on-campus activities, which impacted housing, dining, and parking revenues, as
discussed in Finding 2. However, at the time of our audit, University officials stated their
belief that the negative impacts on revenue are subsiding and they did not expect
longer-term impacts.
After the declaration of a national emergency, the University’s online enrollment
increased slightly while on-campus enrollment remained relatively stable with normal
term-to-term fluctuations and within-term decreases through the fall 2021 term, as
shown in Figure 1. According to University officials, enrollments are returning to the
growth trend experienced before the coronavirus with more than 48,300 students
6
The University assisted students who could not return home to find alternative housing arrangements.
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projected to enroll in the fall 2022 term, a 3-percent increase over the previous year’s
enrollment and the University's highest enrollment ever. 7
Figure 1. University of Cincinnati Student Enrollment by School Term, Spring 2019
through Fall 2021
Source: University of Cincinnati’s Office of the Bursar.
7
Enrollment increased almost 9 percent from 42,656 students in 2013 to 46,388 students in 2019.
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Finding 1. University of Cincinnati Generally
Used Student Aid Grant Funds for Allowable
and Intended Purposes but Needs to
Strengthen its Review and Documentation
Processes
As of September 30, 2021, the University of Cincinnati had awarded 56,079 emergency
financial aid grants to 33,924 students, totaling $42.1 million (71 percent) of the
$58.9 million in Student Aid grant funds awarded to the University under the CARES Act,
CRRSAA, and ARP. We reviewed 155 CARES Act, CRRSAA, and ARP emergency financial
aid awards and identified a small percentage of CARES Act awards that were made to
ineligible students under Federal eligibility requirements existing at that time, but who
would have been eligible for the awards under CRRSAA and ARP due to changes in the
eligibility requirements. Because subsequent changes in Federal eligibility requirements
largely mitigated the effects of these CARES Act payment errors, we concluded that the
University generally used its Student Aid grant funds to award emergency financial aid
grants to students in accordance with applicable Federal requirements. However, as
discussed later in this finding, the University did not have an effective review process to
detect or prevent CARES Act application payment errors or fully document its student
aid award determinations, eligibility criteria, and related management decisions.
Award Process and Distribution Method
The University of Cincinnati used two processes—an automated process and an
application process—to award 56,079 emergency financial aid grants to students
(totaling $42.1 million) under the CARES Act, CRRSAA, and ARP through September 30,
2021. The awards and distributions were processed through the University’s student
information system, as illustrated in Figure 2.
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Figure 2. University of Cincinnati’s Process for Awarding and Distributing Student Aid
Grant Awards to Students
Source: OIG-created graphic.
Automated Process
The University automatically awarded 51,831 or 92 percent of 56,079 emergency
financial aid grants to students (totaling $38.7 million), in amounts ranging from $250 to
$2,000 per term, which did not require students to take any action or complete an
application. 8 Under the automated process, the University developed computer queries
of student enrollment and financial data contained in its student information system.
These queries identified the students who met the eligibility criteria, such as Title IV of
the Higher Education Act of 1965 (Title IV) eligibility, enrollment status, and Expected
Family Contribution (EFC), in effect on the dates of the query. 9
8
The University set CARES Act Student Aid grant awards amounts low to assist as many students as
possible. The University increased award amounts for the CRRSAA and ARP in response to the increased
Student Aid funding provided by these acts coupled with fewer students being eligible for awards under
the requirement to prioritize students with exceptional need.
9
Title IV eligibility criteria include but are not limited to U.S. citizenship or eligible noncitizen; a valid
Social Security Number; and a high school diploma or equivalent. Students who filed a Free Application
for Federal Student Aid (FAFSA), which includes information for determining a student’s Title IV
eligibility, also received an EFC. This number is used to determine the type and amount of financial aid a
student is eligible to receive. Under Title IV, Federal student aid programs can be either based on
financial need (Pell grant, Federal Work Study, direct subsidized loans) or not based on financial need
(direct unsubsidized loans, direct PLUS loans).
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Application Process
The University awarded 4,248 or 8 percent of the 56,079 emergency financial aid grants
to students (totaling $3.4 million) through an application process. A portion of Student
Aid grant funds were set aside to provide an opportunity for students to apply for
emergency financial aid grants of up to $1,000 per term when they either were
financially impacted by the coronavirus but did not receive an emergency financial aid
grant under the automated process or received an automated award but needed
additional financial support. Students completed the application online through the
student information system.
Award Distribution Method
The University distributed HEERF funds to students for the CARES Act and CRRSAA
emergency financial aid grant awards by crediting the student’s account in the student
information system. These HEERF credits were cleared by either a direct deposit into the
student’s linked bank account or issuance of a paper check. For the ARP awards, the
University gave students the option to use their emergency financial aid grant funds to
reduce their outstanding University debt. Students had 21 days to exercise this option
through the student information system and, if they did not exercise this option, would
automatically receive cash payments as described above.
Eligibility Criteria and Award Amounts
The University of Cincinnati awarded emergency financial aid grants to students using
eligibility criteria and award amounts that varied from term to term based on changing
Federal requirements and University policy, as summarized in Table 2.
Table 2. University of Cincinnati’s Student Eligibility Criteria and Award Amounts by
Funding Source, Award Process, and School Term through September 30, 2021
Funding Source, Distance Additional
Award Process, Exceptional Need Student Aid
Title IV-Eligible Education University Award Amount
and School Criteria
Student Criteria
Term(s)
CARES Act $250 plus
Enrolled at $250 if EFC is
Automated
Required Not eligible least half Not applicable $10,000 or less
Spring 2020 time ($500
Summer 2020 maximum)
CARES Act Enrolled at $275 if enrolled
least half full time;
Automated Required Not eligible Not applicable
time and $200 if enrolled
Fall 2020 EFC = $0 part time
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Funding Source, Distance Additional
Award Process, Exceptional Need Student Aid
Title IV-Eligible Education University Award Amount
and School Criteria
Student Criteria
Term(s)
CARES Act
Application Up to $500
Required Not eligible Enrolled Not applicable
Spring 2020 maximum
Summer 2020
$1,000 if Pell
CRRSAA Federal Pell Grant 10 recipient; $750
Enrolled at
(Pell) recipient or not if not Pell
Automated Required Eligible least half
Pell recipient with recipient and
Spring 2021 time
EFC = $12,000 or less EFC is $12,000
or less
CRRSAA Enrolled at
Automated Required Eligible least half Title IV-eligible $2,000
Fall 2021 time
CRRSAA
Enrolled at
Application Up to $500
Required Eligible least half Not applicable
Spring 2021 maximum
time
Summer 2021
ARP $2,000 if debt is
$2,000–$4,300;
Automated Student has
Not required Eligible Enrolled up to $2,000 if
Spring 2021 University debt
debt is less than
Summer 2021 $2,000
EFC is $1,400 or less
ARP for undergraduate
Enrolled at students;
Automated Not required Eligible least half $2,000
time EFC is $0 for
Fall 2021 graduate, medical,
and law students
10
The Federal Pell Grant Program provides need-based grants to low-income undergraduate and certain
postbaccalaureate students to promote access to postsecondary education.
U.S. Department of Education
Office of Inspector General
ED-OIG/A20US0045 14
Funding Source, Distance Additional
Award Process, Exceptional Need Student Aid
Title IV-Eligible Education University Award Amount
and School Criteria
Student Criteria
Term(s)
ARP
Application Up to $1,000
Spring 2021 Not required Eligible Enrolled Not applicable maximum
Summer 2021 each term
Fall 2021
Source: University of Cincinnati’s Enrollment Management Unit.
University of Cincinnati Generally Made Student Aid Awards to
Eligible Students for the Correct Amount Under the CARES Act,
CRRSAA, and ARP
We reviewed enrollment and financial records in the University’s student system for
155 CARES Act, CRRSAA, and ARP automated and application awards and determined
that, except for CARES Act application awards as discussed below, the awards were
generally made to eligible students for the correct amounts. As of December 31, 2020,
the University had distributed $11,136,325 in CARES Act Student Aid grant funds
through 30,273 automated awards to students. We reviewed 30 CARES Act automated
awards (totaling $9,525) and identified 3 payment errors (totaling $1,075). Two awards
of $500 each ($1,000 total) were made to a student who was ineligible due to being
enrolled in a distance learning program and one award was an underpayment of
$75 made to a full-time student. 11 While University officials could not identify a specific
cause for these payment errors, our review indicated they were isolated instances that
were not the result of systemic processing issues. Based on our review results, we
concluded that CARES Act automated awards were generally made to eligible students
for the correct amount.
As of September 30, 2021, the University distributed 13,390 CRRSAA awards
(totaling $11,683,656) and another 11,160 ARP awards (totaling $18,627,169) to
students. Our review of 92 CRRSAA and ARP automated and application awards
11
The University created a CARES Act payment file listing all 30,273 automated awards that contained
specific data elements to support the automated awards were made in compliance with eligibility
requirements in the awarding term. Because our review of the entire payment file identified only two
awards with data elements indicating they were improperly made to a student enrolled in a distance
learning program, we concluded that the payment errors were not caused by a systemic processing
issue.
U.S. Department of Education
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ED-OIG/A20US0045 15
identified only one application payment error of $500 that was made to a student who
was ineligible because they were not enrolled in the term the award was made. Because
our review did not identify any other payment errors or systemic processing issues, we
concluded that CRRSAA and ARP awards were also generally made to eligible students
for the correct amount.
The University’s policy was to distribute emergency financial aid grants to these
students as determined by eligibility data in the student information system and, for
application awards, information that students provided on their applications requesting
emergency financial aid grant funds. The application asked students to indicate if they
had completed a Free Application for Federal Student Aid (FAFSA) form for the current
and upcoming school terms; provide information related to establishing Title IV
eligibility, such as citizenship and social security number; identify the specific financial
impacts—such as housing, food, health care, and technology—in which the student
experienced unusual expenses due to coronavirus; and request the amount of
emergency funds needed. In addition to Title IV eligibility, the University considered
students’ enrollment status and EFC when determining students’ eligibility and award
amounts for the automated awards.
Department guidance stated that students who were enrolled exclusively in a distance
learning (online) program on March 13, 2020, were not eligible for CARES Act
emergency financial aid grants. Further, in June 2020, the Department directed schools
to award emergency financial aid grants only to students who were or could be eligible
to participate in Title IV programs (Title IV-eligible). However, the Department rescinded
this requirement in May 2021, so students no longer had to be Title IV-eligible to receive
an emergency financial aid grant.
Under CRRSAA and ARP, schools could award emergency financial aid grants to students
exclusively enrolled in distance education (distance learners) and were required to
prioritize students with exceptional need. Department guidance provided examples of
conditions indicating exceptional need such as Pell Grant recipients or undergraduates
with extraordinary financial circumstances. Further, the guidance stated that beyond
Pell eligibility, other types of exceptional need could include students eligible for Federal
or State need-based aid or faced significant unexpected expenses, such as loss of
employment (either for themselves or their families), reduced income, or food or
housing insecurity. The Department required schools to carefully document their
Student Aid grant eligibility criteria.
U.S. Department of Education
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ED-OIG/A20US0045 16
University of Cincinnati Did Not Have an Effective Review
Process for the CARES Act Application Awards
The University’s review process for CARES Act application awards was not effective at
preventing or detecting certain types of payment errors. Our review of 33 (totaling
$15,831) of the 1,256 CARES Act application awards (totaling $627,331) identified
payment errors for 23 awards (totaling $11,250), of which 20 awards ($10,000) did not
meet Federal requirements regarding student eligibility in effect at the time of the
award, and 3 awards ($1,250) did not meet the University’s policy for award amounts. 12
Of the 20 awards made to ineligible students based on Federal eligibility requirements,
10 awards went to students who were not Title IV-eligible, 6 awards went to distance
learners, and 4 awards went to students who were not enrolled in the awarding school
term (summer 2020). 13 The remaining three awards went to students who met Federal
eligibility requirements but received multiple awards that exceeded the University’s
policy limiting the application award to a cumulative maximum of $500. It is important
to note that some Federal eligibility requirements changed under CRRSAA and ARP that,
unlike the requirements under the CARES Act, allowed awards to distance learning
students and non-Title IV eligible students. 14
Uniform Guidance at 2 C.F.R. section 200.303 requires schools to establish and maintain
effective internal control that provides reasonable assurance that Federal awards are
managed in compliance with Federal statues, regulations, and grant terms and
conditions. Written policies and procedures facilitate management review and support
quality assurance by clearly defining the roles and responsibilities to maintain
compliance with program requirements and requiring adequate documentation of grant
administration activities.
University officials stated that staff reviewed student applications to ensure they were
complete and indicated a need for financial assistance and reviewed the student
12
The 1,256 CARES Act application awards comprised 4 percent of the 31,529 awards (both application
and automated) distributed under the CARES Act and 2 percent of the 56,079 awards distributed under
all 3 laws.
13
The four students who were not enrolled during the summer 2020 school term received CARES Act
automated awards during the spring 2020 term when they were enrolled at the University.
14
Under CRRSAA and ARP, schools could provide emergency financial aid grants to students who were
exclusively enrolled in distance education (distance learners). Furthermore, on May 14, 2021, the
Department clarified in 86 FR 26608 that student eligibility was not limited to students who were or
could be Title IV-eligible.
U.S. Department of Education
Office of Inspector General
ED-OIG/A20US0045 17
information system to ensure the student met Federal and University criteria to receive
an emergency financial aid grant under the CARES Act. 15 However, we could not verify
the review activities due to a lack of documentation, as discussed later in this finding.
The officials also stated that the University had not developed written policies and
procedures detailing how such reviews should be conducted or the results documented.
Further, the officials said they did not design or implement controls, such as
management reviews, to prevent or detect payment errors after award decisions were
made. Awarding emergency financial aid grants to ineligible students or in amounts that
exceed University policy reduces the amount of Student Aid funding available for other
students seeking emergency assistance.
University of Cincinnati Did Not Fully Document Certain
Student Aid Award Determinations, Eligibility Criteria, and
Related Management Decisions
The University did not provide complete and accurate student eligibility and financial
data to support 3,297 (totaling $3.4 million), or 6 percent, of its award determinations
under the CARES Act, CRRSAA, and ARP. In addition, we found that the University lacked
complete documentation to support its Student Aid awards eligibility criteria and
management decisions related to changes in student eligibility. As part of our audit, we
requested the University to provide documentation and explanations for its award
determinations, eligibility criteria, and management decisions related to compliance
with applicable Federal requirements and University policies.
To support the University’s award determinations, the University created electronic
spreadsheets several months after the awards were distributed that listed the students
who received emergency financial aid grants along with student enrollment and
financial information extracted from the University’s student information system. These
spreadsheets were intended to support that the awards were made to eligible students
for the correct amount. However, we identified 3,297 awards on the spreadsheets that
had missing or inaccurate student information (data quality issues) that made
compliance with eligibility criteria unclear. For example, we identified data quality issues
for most of the 1,256 awards listed on the spreadsheet documenting the application
awards made under the CARES Act, including issues related to students’ enrollment
status (563 awards), enrollment in distance education programs (419 awards), and
15
University officials also stated that the staff assigned to review students’ applications for emergency
financial aid grants under the CARES Act was not assigned to review applications under CRRSAA and
ARP.
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ED-OIG/A20US0045 18
Title IV eligibility (268 awards). While University officials attempted to correct the data
quality issues we identified on the spreadsheets, their efforts were not successful. 16
University officials stated that they used the student enrollment and financial data that
were in the student information system (for automated and application awards) and, for
application awards, the student’s application on the dates that awards were processed
to make the award decisions but did not document the student information that they
used to make these determinations at the time the awards were made. Moreover, they
did not generate or keep documentation of the computer queries of the student
information system that were used under the automated process or record the results
of their manual reviews under the application process.
University officials stated that they could not generate complete and accurate electronic
spreadsheets after award decisions were made because the student information system
did not maintain a complete historical record of student enrollment and financial
information and that the University did not have a separate data warehouse that
preserved historical data. The officials further stated that student information that was
used to determine eligibility for emergency financial aid grants in one school term can
change as students’ circumstances change over time. For example, the University relied
on students’ enrollment status to ensure only students who were enrolled at least half-
time received automated awards for the applicable school terms. However, enrollment
information is dynamic and can change as students add or drop classes, whereby
students could appear eligible on the day awards were processed but later appear
ineligible due to changes in enrollment status.
The University also lacked complete documentation to support its management
decisions related to the numerous changes in student eligibility requirements. Unlike
the CARES Act, CRRSAA and ARP require schools to prioritize students with exceptional
need. The Department requires schools to carefully document how they prioritize
students with exceptional need in distributing financial aid grants to students. The
University used criteria to prioritize students with exceptional need that varied from
term to term for CRRSAA and ARP automated awards. While the University posted a
general description of the student aid eligibility requirements for each term on its public
website, it did not create any additional documentation supporting why it changed its
criteria each term or how revising the criteria each term continued to prioritize students
with exceptional need. For application awards, students indicated their exceptional
16
We also reviewed awards that we identified as having data quality issues on the University’s electronic
spreadsheets for automated awards made under the CARES Act and automated and application awards
made under CRRSAA and ARP, as described in Appendix A (Sampling Methodology).
U.S. Department of Education
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ED-OIG/A20US0045 19
need through completing an online application that included identifying the specific
financial impact related to the coronavirus.
The University’s CRRSAA and ARP automated award eligibility criteria were changed
each term. For CRRSAA automated awards in the spring 2021 term, the University
awarded emergency financial aid grants to students who either received a Pell grant or
had an EFC of $12,000 or less if they were not Pell recipients. Similarly, for ARP
automated awards in the fall 2021, the University made awards to students with EFCs of
$1,400 or less, and graduate, medical and law students with EFCs of zero. In
comparison, for CRRSAA automated awards in the fall 2021 term, the University
awarded emergency financial aid grants to Title IV-eligible students. Then, for ARP
automated awards in the spring and summer 2021 terms, the University made awards
based on students’ outstanding debt owed to the University.
The University established an executive coronavirus committee tasked with overseeing
its use of HEERF grant funds that included establishing the eligibility criteria for
awarding automated and application emergency financial aid grants to students each
term. While this policy setting committee met periodically, it did not create a record of
meeting discussions or policy decisions. As a result, the University did not provide
documentation on how the criteria used each term prioritized students with exceptional
need or how changing the criteria each term continued to achieve that purpose.
Because Department guidance and applicable regulations provide schools discretion to
determine who should receive Student Aid funds based on their own circumstances, we
did not assess whether other eligibility requirements would have more effectively
prioritized students with exceptional need.
As stated in the finding above, Uniform Guidance at 2 C.F.R. section 200.303 requires
schools to establish and maintain effective internal control, and written policies and
procedures are a necessary component of effective internal controls. Furthermore,
Uniform Guidance at 2 C.F.R. section 200.302(b)(3) and (4) requires schools receiving
Federal grant funds, including HEERF, to maintain source documentation that supports
federally funded expenditures and to have effective controls over Federal funds to
assure they are used solely for authorized purposes. The Department’s HEERF guidance
further states that institutions “should carefully document how they prioritize students
with exceptional need in distributing emergency financial aid grants to students, as the
Department is exploring reporting requirements regarding the distribution of
emergency financial aid grants to students (see 2 C.F.R. section 200.334).” The
University is responsible for preparing and maintaining documentation that supports its
responses to grant reporting requirements as well as compliance with program
requirements.
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ED-OIG/A20US0045 20
Without accurate and complete supporting documentation, the University’s existing
processes provide limited assurance that funding decisions for awarding emergency
financial aid grants to students complied with applicable Federal requirements. The
University should carefully document its award determinations, eligibility criteria, and
management decisions, including maintaining a record of the key information it relied
on to qualify students for automated and application awards. It is also important that
such information be available for management to review to ensure emergency financial
aid grants are made to eligible students for the correct amount.
Recommendations
We recommend that the Assistant Secretary for the Office of Postsecondary
Education—
1.1 Require the University of Cincinnati to develop and implement a review process
to prevent or detect payment errors when awarding emergency financial aid
grants to students, including written policies and procedures detailing how the
reviews shall be conducted and the results documented, in accordance with
2 C.F.R. section 200.303.
1.2 Require the University of Cincinnati to develop and implement written policies,
procedures, and management review to ensure that its award determinations,
eligibility criteria, and management decisions related to eligibility for its
emergency financial aid grants to students are adequately documented and
supported at the time award decisions are made, in accordance with 2 C.F.R.
section 200.302(b)(3).
1.3 Require the University of Cincinnati to carefully document how its student aid
eligibility criteria prioritized and continues to prioritize students with
exceptional need throughout the HEERF grant performance period.
University of Cincinnati Comments
The University did not state whether it agreed or disagreed with the finding, but agreed
with the recommendations. The University’s proposed corrective actions included the
development and implementation of a review process to prevent or detect payment
errors and written policies, procedures, and management reviews consistent with the
grant award administration requirements specified in Recommendation 1.1 and
Recommendation 1.2. The University also stated that when awarding future emergency
financial aid grants to students, it will document how its student aid eligibility criteria
prioritizes students with exceptional need.
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ED-OIG/A20US0045 21
OIG Response
The University’s proposed corrective actions, if effectively implemented, are generally
responsive to our recommendations. However, the University’s corrective actions
should also include steps to document how its past student aid eligibility criteria
prioritized students with exceptional need.
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Finding 2. University of Cincinnati Generally
Used Institutional Grant Funds for Allowable
and Intended Purposes but Needs to
Strengthen Certain Processes to Ensure
Compliance with Grant Requirements
As of September 30, 2021, the University of Cincinnati had spent $67.8 million
(92 percent) of the $73.9 million in HEERF Institutional grant funds awarded to the
University, including all of its CARES Act and CRRSAA and 83 percent of its ARP
Institutional funding. The University generally used its Institutional grant funds in
accordance with applicable Federal requirements. However, as discussed later in this
finding, we found that the University overestimated the amount of lost revenue charged
to its HEERF Institutional grant by $797,965 and did not fully comply with Uniform
Guidance for its noncompetitive procurements.
After discussing our audit results with University officials, they informed us that the
University repurposed the $797,965 we questioned to reimburse itself for other
expenditures it deemed as allowable uses of Institutional grant funds.
How University of Cincinnati Used Institutional Grant Funds
Under the CARES Act, Congress intended for schools to use HEERF Institutional grant
funds to cover any costs associated with significant changes to the delivery of
instruction due to coronavirus. CRRSAA and ARP expanded the allowable uses of HEERF
Institutional grant funds to include defraying expenses associated with coronavirus, such
as lost revenue, reimbursement for expenses already incurred, and payroll. In deciding
how to use the HEERF Institutional grant funds, University officials stated that they
reviewed expenditures already incurred to keep the school operating when its
campuses closed on March 23, 2020, reopened in August 2020 with hybrid instruction,
and continued to operate during the coronavirus pandemic. They also reviewed
Department guidance to help in their decision-making on what expenditures might be
allowable for reimbursement under the grant.
Of the $67.8 million spent as of September 30, 2021, the University reported using
$45.4 million (67 percent) to replace lost revenue and $22.4 million (33 percent) for
student refunds and scholarships, expenses related to managing the University’s
coronavirus response, and salaries and benefits, as shown in Table 3 on the next page.
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Table 3. University of Cincinnati’s Institutional Grant Expenditures through
September 30, 2021
Category of Expenditure Amount Percent of Total
Lost revenue from academic and auxiliary-services
sources, including academic program fees, student
$45,423,455 67%
housing, food services, parking, and other campus
services fees
Refunds of housing, campus life and general fees
issued in the form of a student account credit to
40,435 students who had to leave campus when $11,083,224 16%
dormitories were closed, and classes moved to
remote instruction
Operational costs associated with response to
coronavirus (testing, contact tracing, safety $6,241,868 9%
measures, telework costs, canceled study-abroad)
Scholarships in the form of student account credit
covering their non-resident surcharge fees and
$4,094,545 6%
cooperative education fees for 911 students for
coronavirus-related attendance disruptions
Salaries and benefits for 226 employees (faculty,
staff, and students) performing functions
supporting the University's response to the $992,942 2%
coronavirus, such as coronavirus testing and
contact tracing
Total $67,836,034 100%
Source: OIG analysis of the University of Cincinnati’s quarterly HEERF Institutional expenditure
reports posted on the University’s website through September 30, 2021, and Institutional
expenditures detail reports provided by the University.
Required Uses of ARP Institutional Grant Funds
The University of Cincinnati used $400,277 of its ARP Institutional grant funds to
purchase and offer masks, coronavirus testing, and a contact tracing app, and for
services to implement evidence-based practices to monitor and suppress coronavirus in
U.S. Department of Education
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ED-OIG/A20US0045 24
accordance with public health guidelines, as required by ARP. 17 As of September 30,
2021, the University had not yet used ARP Institutional grant funds to conduct direct
outreach to financial aid applicants about the opportunity to receive a financial aid
adjustment due to special financial circumstances, which ARP also required. A University
official stated that the University later used its ARP Institutional grant funds for this
purpose when it mailed outreach postcards to students in November 2021.
University of Cincinnati Charged Unsupported Lost Revenue
Costs to its HEERF Institutional Grant
The University of Cincinnati overestimated the amount of lost revenue charged to its
HEERF Institutional grant by $797,965 (2 percent). This amount consisted of $519,804 in
faculty and staff parking revenue that was not recognized and recorded in the
appropriate period and $278,161 in duplicate charges for parking refunds that the
University had previously charged to another Federal grant—the U.S. Department of
Treasury’s Coronavirus Relief Fund (CRF). We determined that the University’s lost
revenue calculation was overestimated by $797,965 because the University did not have
adequate internal control procedures in place to review and approve the lost revenue
data used in the calculation to ensure it was accurate and supported by appropriate
source documentation.
The University of Cincinnati calculated $43.7 million, or 96 percent of the $45.4 million
in lost revenue charged to HEERF (as shown in Table 3), as a variance between revenue
from academic and auxiliary-services sources for the 9 months that ended March 31,
2020, and the 9 months that ended March 31, 2021. 18 To calculate the variance, the
University identified cost centers 19 within its general ledger accounting records that
experienced losses as a result of coronavirus. When the University used this period-
over-period method to calculate $6.9 million in lost revenue from faculty, staff, and
17
These expenditures were included in the expenditure category for Operational Costs Associated with
Response to Coronavirus ($6.2 million), as shown in Table 3. The $6.2 million included $4.2 million in
Campus Safety costs, which included the $400,277 to implement evidence-based practices to monitor
and suppress coronavirus and was reimbursed with ARP Institutional grant funds.
18
The University calculated the remaining 4 percent ($1.7 million) in lost revenue as an estimate of
waived faculty and staff parking fees for the period March 25, 2020, through November 30, 2020, when
the University operated remotely ($1.6 million), and revenues that were eliminated when the College-
Conservatory of Music cancelled art lessons and performances due to coronavirus ($142,000).
19
The University defines a cost center as a financial activity segregated based on the type of operation
at the University. Several cost centers often pertained to one revenue general ledger account.
U.S. Department of Education
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ED-OIG/A20US0045 25
student parking fees, it overstated lost revenue by $797,965 due to the improper
revenue recognition and duplicate charges.
The University did not have procedures in place to ensure that its calculation of lost
revenue was consistent with its revenue recognition policies for all of the revenue
sources included in the calculation. The University relied on the revenue balances as
generated from its accounting records but did not review the underlying accounting
data to ensure revenue was properly recognized and did not include duplicate lost
revenue charges. Consistent with the cost principles of the Uniform Guidance (2 C.F.R.
part 200 subpart E), the Department’s lost revenue guidance requires that the
calculation of lost revenue must be accorded consistent treatment and be consistent
with policies and procedures that apply uniformly to federally financed and other
activities of the institution. 20
Uniform Guidance at 2 C.F.R. section 200.303 further requires schools to establish and
maintain effective internal control that provides reasonable assurance that Federal
awards are managed in compliance with Federal statues, regulations, and grant terms
and conditions. The University of Cincinnati did not establish adequate internal control
procedures, such as transaction and activity review and approval requirements, for
charging lost revenue to the grant that would identify and prevent underlying data
issues and duplicate charges.
As a result, the University of Cincinnati improperly used $797,965 of its HEERF
Institutional grant funds to reimburse itself for lost revenue that was not supported by
its accounting records. Proper management reviews and documentation supporting
charges to Federal grants help to protect taxpayer dollars; minimize the risk of fraud,
waste, and abuse; and ensure Federal funds are used for allowable and intended
purposes.
University of Cincinnati Repurposed Questioned Costs
After we discussed our audit results with University officials, they informed us that in
June 2022 they repurposed the $797,965 that we questioned in this finding. University
officials stated that they did not return the funds to the Department because the
University’s HEERF Institutional grant expenditures for June 2022 exceeded the amount
that we questioned. Instead, the University reduced its June 2022 drawdown by
$797,965 to use this amount to reimburse itself for that month’s Institutional
20
Question 9 in “Higher Education Emergency Relief Fund (HEERF I, II, and III) Lost Revenue Frequently
Asked Questions,” March 19, 2021. HEERF I refers to grant funds awarded under the CARES Act, HEERF II
refers to the CRRSSA, and HEERF III refers to ARP.
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Office of Inspector General
ED-OIG/A20US0045 26
expenditures that were charged to the HEERF grant. We did not review the repurposed
expenditures because this activity occurred outside our audit period.
University of Cincinnati Did Not Fully Comply with Uniform
Guidance for Its Noncompetitive Procurements
Of the $6.2 million in expenditures that the University of Cincinnati incurred for
operational costs associated with its response to the coronavirus (as shown in Table 3),
it did not provide adequate documentation supporting a noncompetitive procurement
process for Institutional grant purchases of $1,916,041 involving 11 vendors (as shown
in Table 4) each exceeding the University’s micro-purchase threshold of $15,000. 21
Uniform Guidance general procurement standards require a competitive process for
such purchases, unless specific circumstances apply and the school has sufficient
records to support its rationale for the noncompetitive method of procurement. The
University did not maintain adequate documentation to support its rationale for these
noncompetitive procurements. Moreover, the University did not document its
determination of the reasonableness of these costs and did not perform price analyses
for purchases from 3 of the 11 vendors that exceeded the simplified acquisition
threshold (SAT) of $250,000, which is also required by Uniform Guidance. 22
Table 4. University of Cincinnati’s Unsupported Noncompetitive Procurements
Number of Percent of Total
Expenditure Description Amount Amount
Vendors
Coronavirus Testing 23 3 $1,645,364 86%
Personal Protective Equipment 3 146,860 8%
21
In a letter dated October 18, 2019, the U.S. Department of Health and Human Services approved the
University’s micro-purchase threshold of $15,000 for goods and $30,000 for professional,
noncompetitive services. Uniform Guidance at 2 C.F.R. section 200.320 defines “micro-purchase
threshold” as the dollar amount at or below which a non-Federal entity may purchase property or
services using micro-purchase procedures, including noncompetitive procurement.
22
Uniform Guidance at 2 C.F.R. section 200.320 defines SAT as the dollar amount below which a non-
Federal entity may purchase property or services using small purchase methods where price or rate
quotations must be obtained from an adequate number of qualified sources as determined appropriate
by the school. Purchases below SAT do not require formal procurement methods such as sealed bids or
proposals.
23
Purchases from each of the three coronavirus testing vendors also exceeded the SAT of $250,000.
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Number of Percent of Total
Expenditure Description Amount Amount
Vendors
Software 2 99,380 5%
Other 3 24,437 1%
Total 11 $1,916,041 100%
Source: OIG’s analysis of the University of Cincinnati’s expenditure data.
Uniform Guidance sets procurement standards and cost principles for Federal awards,
including the following requirements:
• 2 C.F.R. section 200.318(i) requires the University to maintain sufficient records
to detail the history of procurement, including the rationale for the method of
procurement and the basis for the contract price.
• 2 C.F.R. sections 200.403 and 200.404 provide that costs must be adequately
documented and determined reasonable.
• 2 C.F.R. section 200.324 requires cost or price analysis in connection with every
procurement action in excess of the SAT.
Uniform Guidance also defines specific circumstances in which noncompetitive
procurement can be used, such as when the item is available from a single source, the
public exigency will not permit delay resulting from a competitive process, or under
express authorization by the Federal awarding agency. The University’s written
procurement policies require bid-waiver letters or letters of justification to document
circumstances for noncompetitive procurements. According to University policy, such
waiver requests must be in writing, submitted to the appropriate Central Purchasing
buyer, and approved. However, for 10 of the 11 vendors with noncompetitive
procurements totaling $1,915,036, either the University did not prepare bid-waiver
letters ($1,665,075 of expenditures) or the letters were missing approval by Central
Purchasing ($249,961 of expenditures). The University did not document its justification
for using the alternative procedures. Moreover, the University did not document the
reasonableness of the contracted prices or rates and did not perform price analyses for
purchases from the three vendors that exceeded the SAT of $250,000.
The University contracted with three vendors totaling $156,960 in March and April 2020
and with eight vendors totaling $1,759,081 during the period August 2020 through
January 2021. University officials stated that they followed the University’s procurement
policies and procedures applicable to non-Federal grants because they were not
expecting Federal funding, such as HEERF Institutional grant funds, to cover the
purchases. University officials also stated that they authorized and followed expedited
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ED-OIG/A20US0045 28
acquisition processes needed to quickly put life-safety measures in place during the
coronavirus emergency. 24 The officials further stated that at times, the acquisitions
were made under intense pressure where blanket and verbal approvals were accepted.
We recognize the challenging circumstances under which officials were operating early
in the pandemic; however, before the University decided to charge the $1,916,041 to its
HEERF Institutional grant in June 2021, it should have ensured that the associated
procurements were documented in accordance with Federal requirements.
With noncompetitive procurements that did not consider reasonableness of cost, the
University might be paying more for the same goods and services, or receiving goods
and services of inferior quality, when compared to other vendors. Lack of approval for
noncompetitive procurements improperly precludes the cost and quality benefits of a
competitive procurement process. Further, it is important that Federal grantees, such as
the University of Cincinnati, perform a price analysis for purchases over the SAT to
ensure that they do not overpay for large purchases.
Recommendations
We recommend that the Assistant Secretary for the Office of Postsecondary
Education—
2.1 Require the University of Cincinnati to develop and implement written policies
and procedures, including procedures that would identify and prevent improper
revenue recognition and duplicate charges, to ensure that future calculations
for charging lost revenue to its HEERF Institutional grant are reviewed for
accuracy and consistency with its financial reporting policies and procedures.
2.2 Determine whether the University of Cincinnati implemented appropriate
corrective actions to resolve the $797,965 in unsupported lost revenue costs it
charged to its HEERF Institutional grant; and, if the corrective actions are
inappropriate, require the University to either return the funds to the
Department or reallocate the funds for allowable expenditures.
24
On March 9, 2020, the State of Ohio’s governor declared a State emergency regarding the
coronavirus. In response, on March 25, 2020, the Ohio Department of Administrative Services issued a
notice suspending competitive procurement requirements for State agencies for purchases of
“resources and supplies necessary to protect the health, safety, and welfare of Ohioans and resolve the
COVID-19 emergency.” The University’s Purchasing Director stated that the University is not a State
agency and follows its own or Federal procurement rules for Federal grants; however, the State’s notice
added support to the University treating the coronavirus as a life-safety issue.
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ED-OIG/A20US0045 29
2.3 Determine whether the $1,916,041 that the University of Cincinnati charged to
its HEERF Institutional grant for noncompetitive procurements was reasonable
when compared to the costs of suitable alternatives; and, if the charges were
inappropriate, require the University to either return the funds to the
Department or reallocate the funds for allowable expenditures.
2.4 Require the University of Cincinnati to develop and implement written policies
and procedures to ensure that procurements charged to its HEERF Institutional
grant are in accordance with applicable Federal requirements; and it
consistently follows its procurement policies and procedures, including
maintaining sufficient documentation to support its rationale for
noncompetitive procurements and the basis for and reasonableness of the
contract price.
University of Cincinnati Comments
The University did not state whether it agreed or disagreed with the finding, but agreed
with the recommendations. The University’s proposed corrective actions included the
development and implementation of written policies and procedures consistent with
the applicable lost revenue and procurement requirements specified in
Recommendation 2.1 and Recommendation 2.4. The University also stated that it has
repurposed the funds associated with the lost revenue costs identified in
Recommendation 2.2 for purposes it believes are allowable and believes the
noncompetitive procurements identified in Recommendation 2.3 were reasonable when
compared to the costs of suitable alternatives.
OIG Response
The University’s proposed corrective actions for Recommendations 2.1 and 2.4, if
effectively implemented, are responsive to our recommendations. For
Recommendations 2.2 and 2.3, the University will need to work with Department
officials who are responsible for determining the appropriateness of corrective actions
already taken to resolve the unsupported lost revenue costs and the reasonableness of
costs associated with noncompetitive procurements.
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ED-OIG/A20US0045 30
Finding 3. University of Cincinnati Did Not Fully
Comply with Federal Cash Management
Requirements
The University’s administration of HEERF Student Aid grant funds did not fulfill certain
Federal cash management requirements. Specifically, the University did not minimize
the time between drawing down and disbursing its CARES Act Student Aid grant funds
and remitted imputed interest on unspent CARES Act Student Aid grant funds rather
than earned interest.
When the Department made CARES Act Student Aid grant funds available, the University
of Cincinnati deviated from its existing cash management process of reimbursement and
instead drew down the funds as advance payments. Senior University officials stated
that they drew down all of the University’s CARES Act Student Aid grant funds as soon as
the funds were awarded because they understood that it was allowable under the terms
of the award notice since the funds were provided under emergency measures and the
University had an immediate need. However, the University did not update its policies
and procedures to incorporate the Federal cash management requirements for advance
payments. Instead, the University maintained the unspent CARES Act Student Aid grant
funds in its temporary investment pool (TIP) and imputed an interest amount, as
described later in this finding, using the same processes as for all other reimbursed
Federal funds. 25
Federal regulations at 2 C.F.R. section 200.305(b) state that non-Federal entities, such as
the University, “must minimize the time elapsing between the transfer of funds from
[the Department] and the disbursement by the non-Federal entity ….” The regulations
further state that advance payments must be limited to actual cash requirements for
approved purposes, that these payments must be held in interest-bearing accounts, and
that up to $500 earned interest per year may be retained by the non-Federal entity for
administrative expenses. Any additional interest earned on Federal advance payments
deposited in interest-bearing accounts must be remitted to the Department of Health
and Human Services Payment Management System. Non-Federal entities that draw
down funds in advance of immediate cash needs must maintain written procedures that
minimize the time between drawing down and disbursing Federal funds.
25
The University drew down the Institutional portion of its CARES Act grant funds to reimburse itself for
program expenditures, and similarly reimbursed itself for Student Aid and Institutional expenditures
under CRRSAA and ARP.
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In accordance with its cash management policies and procedures, the University
typically uses its own funds first before drawing down Federal funds to reimburse itself
for program expenditures. Its policy is to draw down Federal funds after program costs
are incurred and not as an advance. The University’s existing cash management policies
and procedures did not address advance payments or the Federal requirement to
minimize the time between drawing down and disbursing Federal funds.
When signing the Recipient’s Funding Certification and Agreement in April 2020 to
access the University’s CARES Act Student Aid grant funds, the University certified that it
would comply with 2 C.F.R. part 200. Further, Enclosure 4 of the Grant Award
Notification for the Student Aid grant, dated in April 2020, also reminded grantees of
existing cash management requirements in 2 C.F.R. part 200 and described the
requirements in detail. Therefore, the University officials were made aware of, agreed
to comply with, and should have ensured compliance with Federal cash management
requirements.
University of Cincinnati Did Not Minimize the Time Between
Drawing Down and Disbursing CARES Act Student Aid Grant
Funds
The University of Cincinnati drew down its CARES Act Student Aid grant funds in
advance of immediate cash needs instead of properly minimizing the time between
drawing down and disbursing these funds. The Department authorized $11,763,656 in
CARES Act Student Aid grant funds for the University on April 25, 2020, and the
University drew down all of the funds on May 5, 2020. The University did not have an
immediate cash need for all of the drawn funds, as discussed below; thus, the University
did not comply with 2 C.F.R. section 200.305(b).
As shown in Table 5, the University disbursed most (71 percent) of its CARES Act Student
Aid grant funds within 15 days of drawing down the funds and had disbursed nearly all
of the funds (91 percent) by the end of May 2020. However, the University of Cincinnati
inappropriately held onto the remaining funds, ranging from about $500 to $1 million,
as it continued to periodically disburse grant funds up through December 2020, more
than 225 days after drawing down the funds.
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Table 5. Draw Down and Disbursement Activity for University of Cincinnati's CARES
Act Student Aid Grant Funds, May 5, 2020, through December 18, 2020
Remaining Percent of
Draw Down and
CARES Act Drawn Funds Number of
Date 26 (Disbursement)
Student Aid Disbursed Days Elapsed
Amount
Grant Funds (Cumulative)
May 5, 2020 $11,763,656 $11,763,656 0% 0
May 18, 2020 (8,347,000) 3,416,656 71% 13
May 28, 2020 (2,364,250) 1,052,406 91% 23
June 10, 2020 (41,500) 1,010,906 91% 36
June 16, 2020 (500) 1,010,406 91% 42
July 2, 2020 (389,000) 621,406 95% 58
July 31, 2020 (237,000) 384,406 97% 87
September 1, 2020 (250) 384,156 97% 119
November 16, 2020 (500) 383,656 97% 195
December 4, 2020 (500) 383,156 97% 213
December 17, 2020 (382,650) 506 100% 226
December 18, 2020 (506) – 100% 227
Source: OIG’s Analysis of the University of Cincinnati’s CARES Act Emergency Financial Aid
Payments report.
University officials stated that they drew down all of the CARES Act Student Aid grant
funds as soon as the funds were available because they understood that the grant
26
The CARES Act Student Aid disbursements made from May through November 2020 were for
emergency financial aid grants to students enrolled at the University for the spring and summer 2020
school terms. The disbursements made in December 2020 were generally for the fall 2020 school term.
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ED-OIG/A20US0045 33
allowed for an emergency advance of funds. The grant did allow for funds to be drawn
down in advance of actual needs but, as noted above, University officials were also
made aware of and agreed to comply with the Federal cash requirements to minimize
the time between drawing down and disbursing the funds. Thus, the officials should not
have drawn down the funds until they were prepared to disburse them.
It is important that schools not draw Federal funds before they have immediate needs
for the funds. The U.S. Treasury incurs additional borrowing costs when a school draws
Federal funds in advance of its immediate cash needs because the U.S. Treasury often
borrows the cash needed to fund Federal programs and, as a result, incurs interest
costs.
University of Cincinnati Remitted Imputed Rather Than Earned
Interest on Its CARES Act Student Aid Grant Funds
The University of Cincinnati maintained its CARES Act Student Aid grant funds in a TIP, 27
and calculated and remitted an imputed amount of interest based on a lower Treasury
bill rate rather than the amount of earnings the unspent CARES Act Student Aid grant
funds generated based on the TIP’s average rate of return. Specifically, using
information on the CARES Act Student Aid grant fund balances from its accounting
system for May through December 2020, the University’s Treasury Department imputed
interest monthly on the grant funds’ daily average balances using 3-month Treasury bill
rates. Using the Treasury bill rates, total imputed interest amounted to $1,450. The
University remitted $1,270 of this amount to the Department of Health and Human
Services in September 2020 and retained $180 for administrative expense. 28
Further, University officials stated that using 3-month Treasury bill rates to impute
interest was comparable to the interest rate of the University’s cash deposits. However,
we determined that the TIP’s average rate of return was generally higher than the
3-month Treasury bill rates for the period May through December 2020. We also
determined that the TIP’s average rate of return would provide an accurate accounting
of interest earned if used in the University’s calculation than the 3-month Treasury bill
27
The TIP includes cash, bank depositories, money market funds, and fixed income securities of
relatively short duration. The University manages the TIP based on cash flow needs and within the
constraints of its TIP investment policy statement.
28
The $1,270 in imputed interest that the University remitted in September 2020 was for May and
June 2020, when the average outstanding balances for the CARES Act Student Aid grant funds were
more than $1 million. University officials stated that they retained the $180 in imputed interest for July
through December 2020 as administrative expense since it was less than $500.
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rates. If the University had used the TIP’s average rate of return for those months, the
earnings attributable to the unspent CARES Act Student Aid grant funds would have
amounted to $36,889, which was $35,439 more than the $1,450 in imputed interest.
The University of Cincinnati did not have policies and procedures to determine and
remit actual earnings on Federal advance payments and remitted imputed interest
amounts instead. If Federal advances are maintained and commingled with other
Federal and non-Federal funds in a diversified portfolio of accounts like the TIP, the
University’s policies and procedures should ensure that it accurately accounts for the
interest earned on the unspent Federal funds. It is important that the University have
effective control and accountability of Federal cash advances to safeguard them and to
ensure compliance with Federal regulations.
Recommendations
We recommend that the Assistant Secretary for the Office of Postsecondary
Education—
3.1 Require the University of Cincinnati to incorporate in its policies and procedures
and implement the cash management requirements for minimizing the time
between drawing down and disbursing Federal grant funds, and remitting
interest earned in excess of $500 in accordance with 2 C.F.R. section 200.305(b).
3.2 Require the University of Cincinnati to remit $35,439 based on the TIP’s average
rate of return, less no more than $320 ($500 minus the $180 already retained)
for administrative expenses if applicable; and remit the actual amount of earned
interest on any future advances of Federal funds, in accordance with 2 C.F.R.
section 200.305(b)(9).
University of Cincinnati Comments
The University did not state whether it agreed or disagreed with the finding. It agreed
with Recommendation 3.1 but disagreed with Recommendation 3.2. In response to
Recommendation 3.1, the University stated that its existing policy is to draw down funds
for reimbursement of expenditures and not to receive funds in advance. However, the
University believed that the Department permitted HEERF funds to be drawn down
when they became available due to the emergency nature of the funding. Regarding
Recommendation 3.2, the University stated that the funds were invested in a secure
money market fund which was not earning the long-term rate that the $35,439
calculation is based on.
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Office of Inspector General
ED-OIG/A20US0045 35
OIG Response
For Recommendation 3.1, the University’s existing policy appears to incorporate the
applicable cash management requirements, and if followed for HEERF funding in the
future, would be responsive to Recommendation 3.1. However, we disagree with the
University’s statement in response to Recommendation 3.2 that the funds were
invested in a secure money market fund. We acknowledge that the University’s TIP,
where the funds were deposited, included a money market fund among many other
investment options. However, the University did not provide sufficient evidence to
demonstrate that the funds were deposited and held in this specific money market fund
within the TIP. The funds were commingled with other Federal and non-Federal funds
held in the TIP and yielded $35,439 of earnings based on the TIP’s average rate of
return. Therefore, we did not make any changes to the finding or Recommendation 3.2.
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ED-OIG/A20US0045 36
Finding 4. University of Cincinnati’s HEERF
Quarterly Reporting Was Not Always Accurate
and Publicly Available
The University of Cincinnati’s Student Aid and Institutional reporting was generally
complete and timely but was not always accurate. Specifically, the University improperly
reported $4.1 million of scholarships awarded to students in the form of student
account credit as additional emergency financial aid grants to students in a quarterly
report of HEERF Institutional expenditures. In addition, the University did not keep
previous Student Aid and Institutional quarterly reports posted on its public website after
posting updated reports.
Schools must report publicly on their use of HEERF funds by posting the required
information on the school’s primary website each quarter. The Department prescribed
the contents and due dates for the quarterly Student Aid and Institutional reports. The
Department also required schools to submit an annual performance report by completing
an online data collection form. We determined that the information in the University of
Cincinnati’s Student Aid and Institutional quarterly reports for the reporting periods
through the quarter ending September 30, 2021, was generally complete and timely, but
not always accurate as discussed below. In addition, the information in the University’s
first HEERF annual performance report for the period ending December 31, 2020, was
generally accurate, complete, and timely.
After we discussed our audit results with University officials, the University revised its
quarterly HEERF Institutional expenditure report for the quarter that ended June 30,
2021, to properly identify the $4.1 million as scholarships and uploaded the missing
reports to its website.
University of Cincinnati Did Not Properly Report $4.1 Million of
Institutional Expenditures
The University of Cincinnati used HEERF Institutional grant funds to reimburse itself for
$4.1 million in scholarships provided to 911 students whose attendance was disrupted
by the coronavirus pandemic in the summer and fall 2020 school terms and spring 2021
term. However, we found that the University incorrectly reported these scholarships as
additional emergency financial aid grant payments to students in its quarterly HEERF
Institutional expenditure report for the quarter that ended June 30, 2021. The
University had distributed the scholarships as credits that were posted to student
accounts, which reduced student account balances and generally were not paid to
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ED-OIG/A20US0045 37
students. 29 The University also did not obtain students’ written consent to apply the
award funds to student accounts, which would be required for the account credits to
qualify as emergency financial aid payments to students under criteria applicable to the
HEERF Student Aid grant.
The University’s HEERF Institutional Portion Certification and Agreement provides that
HEERF Institutional grant funds can be used to provide additional emergency financial
aid grants to students, and Department guidance clarified that institutions may not use
the financial aid grants to satisfy a student’s account balance without the student’s
written affirmative consent. 30 Uniform Guidance at 2 C.F.R. section 200.403(b)
additionally provides that costs must conform to any limitations or exclusions set forth
in the Federal award as to their types and amount in order to be allowable under
Federal awards.
University officials incorrectly determined and reported these scholarships as
emergency financial aid payments to students reimbursable from HEERF Institutional
grant funds. The officials made this decision without properly considering or
understanding all relevant attributes of the expenditure, including the nature of the
scholarship transactions, available supporting records and documents, and
requirements for using HEERF Institutional grant funds to provide emergency financial
aid grants to students. The University should have reported the $4.1 million as
scholarships instead of as additional emergency financial aid grants to students.
Schools are required to report publicly and accurately on their use of HEERF Institutional
grant funds on the school’s primary website each quarter to ensure transparency and
accountability as to when and how institutions expended funds. The University of
Cincinnati did not have written policies and procedures to ensure that the expenditures
included in its quarterly HEERF Institutional expenditure reports are accurate and
reported in the appropriate expenditure category. When transparency and
accountability are not achieved in the reporting of grantees’ use of Federal grant funds,
it negatively impacts the Department’s ability to effectively monitor Federal grants.
29
In instances where the scholarship resulted in a credit balance in a student’s account, the credit
balance was disbursed to the student.
30
“Higher Education Emergency Relief Fund (HEERF) II Public and Private Nonprofit Institution (a)(1)
Programs (CFDA 84.425E and 84.425F) Frequently Asked Questions, Coronavirus Response and Relief
Supplemental Appropriations Act, 2021,” published January 14, 2021. Question 8 addresses
requirements for making financial aid grants to students and Question 9 addresses how students may
use their grants.
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ED-OIG/A20US0045 38
After we discussed our audit results with University officials, in July 2022 the University
revised its quarterly HEERF Institutional expenditure report for the quarter that ended
June 30, 2021. In the revised report, the University’s use of HEERF Institutional grant
funds for the scholarships properly appears as an “Other” use (with explanatory
information) rather than as additional emergency financial aid grants to students. We
confirmed that the University posted the revised report on its public website in
August 2022.
University of Cincinnati Did Not Keep Previous Student Aid and
Institutional Reports on Its Public Website
In October 2020, the Department offered a webinar on the quarterly reporting
requirements for HEERF grantees. Following the webinar, the Department issued
guidance about maintaining all of the quarterly reports on the school’s public website.
Specifically, technical Frequently Asked Questions (FAQ) Question 2 in the guidance
states that “[w]e ask that institutions separately maintain each quarterly report on their
website, which adds transparency and accountability as to when and how institutions
expended funds.” 31
Because schools were not required to submit the quarterly reports to the Department,
the availability of reports on recipients’ public facing websites provides an important
means to ensure transparency and accountability. In April 2022, we noted that the
University of Cincinnati did not keep links to previous versions of quarterly HEERF
Student Aid and Institutional reports on its public website. When we brought this matter
to their attention, University officials stated that they were not aware of the
Department’s posting requirement and uploaded the missing reports to their website by
June 2022.
Recommendations
We recommend that the Assistant Secretary for the Office of Postsecondary
Education—
4.1 Require the University of Cincinnati to develop and implement written policies
and procedures that incorporate the HEERF program’s reporting requirements
and ensure that the expenditures in its quarterly HEERF Institutional
expenditure reports are accurate and reported in the appropriate expenditure
category.
31
In a letter to HEERF project directors dated October 19, 2020, the Department provided a summary of
the webinar, resources, and Technical FAQs on the quarterly public reporting requirements.
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University of Cincinnati Comments
The University did not state whether it agreed or disagreed with the finding, but agreed
with the recommendation. The University did not state its planned corrective actions in
response to this recommendation.
OIG Response
To be responsive to our recommendation, the University’s corrective actions should
include the development and implementation of written policies and procedures that
incorporate the HEERF program’s reporting requirements and better ensure the
accuracy and completeness of HEERF expenditure reports.
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Appendix A. Scope and Methodology
Our audit of the University of Cincinnati’s use of HEERF funds covered March 13, 2020,
through September 30, 2021. Our audit also covered the University’s cash management
practices and reporting of HEERF expenditures.
To achieve our audit objective, we gained an understanding of the following laws,
regulations, Department guidance, and grant documents relevant to HEERF:
• Section 18004 of the CARES Act, Higher Education Emergency Relief Fund;
• Section 314 of CRRSAA, Higher Education Emergency Relief Fund;
• Section 2003 of ARP, Higher Education Emergency Relief Fund;
• 2 C.F.R. part 200 (Uniform Guidance), including section 200.302(b)(3) and (4)
(financial management documentation and controls), section 200.303 (internal
controls), section 200.305(b) (cash management for non-Federal entities),
section 200.309 (period of performance), sections 200.318–320 (general
procurement standards, competition, and methods of procurement), section
200.324 (contract cost and price), section 200.334 (record retention), and
sections 200.403–404 (cost principles);
• Department’s Interim Final Rule (June 17, 2020) and Final Regulation (May 14,
2021) regarding student eligibility; Secretary of Education letters (April 9 and
April 21, 2020) addressing school access to HEERF grants; and eight HEERF FAQ
documents issued from April 2020 through July 2021, including Student Portion
FAQs (April 9, 2020), “FAQ Rollup Document” (October 14, 2020), “Higher
Education Emergency Relief Fund (HEERF) II Public and Private Nonprofit
Institution (a)(1) Programs (CFDA 84.425E and 84.425F) Frequently Asked
Questions, Coronavirus Response and Relief Supplemental Appropriations Act,
2021” (January 14, 2021), “Higher Education Emergency Relief Fund (HEERF I, II,
and III) Lost Revenue Frequently Asked Questions” (March 19, 2021), and
“Higher Education Emergency Relief Fund III Frequently Asked Questions,
American Rescue Plan Act of 2021” (May 11, 2021); and
• University of Cincinnati’s Student Aid and Institutional grant documents,
including its signed Certification and Agreement and the Grant Award
Notification documents.
We also reviewed the following prior OIG and Government Accountability Office (GAO)
reports to gain an understanding of common risks associated with managing emergency
financial relief grants, such as HEERF:
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• OIG Reports:
• “Remington College’s Use of Higher Education Emergency Relief Fund
Student Aid and Institutional Grants,” ED-OIG/A20CA0017, September 28,
2021;
• “Lincoln College of Technology’s Use of Higher Education Emergency Relief
Fund Student Aid and Institutional Grants,” ED-OIG/A20CA0016, September
24, 2021;
• “Challenges for Consideration in Implementing and Overseeing the CARES
Act,” ED-OIG/X20DC0003, September 2020; and
• “Lessons from Implementing the American Recovery and Reinvestment Act
of 2009,” ED-OIG/X09M0002, September 2014.
• GAO Report—"COVID-19: Opportunities to Improve Federal Response Efforts,”
GAO-20-625, June 2020.
Through interviews, we gained an understanding of the University of Cincinnati’s
processes for drawing down and managing HEERF grant funds, awarding and
distributing emergency financial aid grants to students, spending Institutional grant
funds, determining lost revenue charges, and preparing required HEERF quarterly
reports and first annual performance report. We interviewed senior officials from the
Finance/Accounting, Controller, Treasury, Enrollment Management, Bursar and Central
Purchasing departments who had a significant role in administering the University’s
HEERF grants. To assess the reliability of the testimonial evidence, we compared and
corroborated information obtained through interviews by reviewing available
documents and records. We concluded that the testimonial evidence we obtained was
sufficiently reliable within the context of our audit objective.
We reviewed the University’s written policies and procedures for managing, authorizing,
and accounting for HEERF-related transactions and expenditures. We also reviewed the
University’s written policies and procedures for HEERF-related cash management and
reviewed the University’s drawdown information from the Department’s G5 system.
Additionally, we reviewed relevant information from the University’s bank statements;
accounting and student information systems; and electronic spreadsheets documenting
HEERF distribution and expenditure data. We describe how we used this information to
review the University’s use of Student Aid and Institutional grant funds in the Sampling
Methodology section on the next page and cash management practices and HEERF
reports below.
Cash Management. We compared the dates and amounts of the University’s
drawdowns of Student Aid and Institutional grant funds (obtained from the
Department’s G5 system) to its expenditure records to determine whether the
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University of Cincinnati minimized the time between drawdown and disbursement of
those funds. We also traced drawdown information from the Department’s G5 system
to the University’s bank statements and accounting records to verify that the
information reconciled. Lastly, we reviewed the types of accounts that were used to
deposit the University’s HEERF funds to determine whether the accounts earned
interest and the University remitted an appropriate amount of earned interest to the
Federal government as required.
Reporting. We reviewed the following Student Aid and Institutional reports to
determine whether the information included in those reports was complete, accurate,
and reported on time:
• Student Aid and Institutional reports for the quarterly periods ending
September 30, 2020, through September 30, 2021.
• First Annual Performance Report covering CARES Act Student Aid and
Institutional grant activities from March 13, 2020, through December 31, 2020.
To determine whether the reports included complete and accurate information, we
compared the information in each report to the Department’s reporting requirements
and to the applicable underlying source data (for example, University provided Student
Aid award files). To determine whether the reports were submitted on time, we
compared each of the quarterly Student Aid and Institutional reports’ posting date to
the reporting due date established by the Department. Similarly, we determined
whether the University submitted its first annual performance report on time by
comparing the date the University submitted the report to the Department to the
required due date.
Sampling Methodology
We tested a sample of Student Aid distributions and Institutional expenditures to
determine whether the University of Cincinnati used the Student Aid and Institutional
portions of its HEERF funds for allowable and intended purposes.
Student Aid Expenditure Selection and Testing
During our audit period, the University used HEERF Student Aid grant funds to award
56,079 emergency financial aid grants to students. We selected a sample of 155 grant
awards using a combined 100-percent review, random nonstatistical, stratified sampling
approach, as summarized in Table 6. We developed 11 strata and used a combination of
a 100-percent review, a risk-based approach, and a random sampling approach to select
awards from each stratum. To develop the strata, we conducted the following steps:
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• We analyzed the data that the University created in six stand-alone electronic
spreadsheets listing the universe of emergency financial aid grants awarded to
students through its automated and application processes under the CARES
Act, CRRSAA, and ARP.
• From these data, we created three unique groups based on each coronavirus
relief law (funding source).
• Within each group, we created a separate stratum based on the University’s
award process (automated or application) and, because we identified data
quality issues in its electronic spreadsheets, a separate stratum based on the
absence or presence of data quality issues where applicable. 32
Once we defined the 11 strata, we stratified the awards by school term and used a
100-percent review, risk-based approach, and random nonstatistical sampling approach
to select the awards for review in each stratum. While our strata were representative of
the universe of emergency financial aid grant awards, the sampling methodology was
not designed to be projected to the universe of awards.
32
When we assessed the reliability of the data in the University’s electronic spreadsheets, we noted that
most of the grant awards had complete data for our testing purposes. However, a significant number of
awards had missing or inaccurate data that increased the risk of payment errors stemming from
systemic processing issues or ineffective internal controls. To address this condition, our sampling
methodology included selecting 72 awards without data quality issues and 83 awards with data quality
issues (total of 155 awards selected for review).
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Table 6. Universe and Sample of Student Aid Grant Expenditures through
September 30, 2021
Universe Award Sample Award Sample Coverage Award
Group Description 33 Count and Dollar Count and Dollar Count and Dollar Amount
Stratum Amount Amount (Percent by Stratum)
CARES Act automated awards
without data quality issues –
randomly selected 4 awards 29,508 awards 12 awards Less than 1% awards
1-1
from each school term $10,867,625 $3,850 Less than 1%
(spring, summer, and fall
2020)
CARES Act automated awards
with data quality issues—
randomly selected 3 awards 765 awards 18 awards 2.4% awards
1-2
with payment errors and 15 $268,700 $5,675 2.1%
awards with unclear
compliance
CARES Act application awards
without data quality issues— 590 awards 4 awards 0.7% awards
1-3 randomly selected 3 awards
from spring 2020 and 1 award $295,000 $2,000 0.7%
from summer 2020 terms
CARES Act application awards
with data quality issues—
selected the 5 awards for 666 awards 29 awards 4.4% awards
1-4 distance learners (potential
payment error) and 24 $332,331 $13,831 4.2%
awards with unclear
compliance
CRRSA Act automated awards
without data quality issues—
randomly selected 8 awards 12,850 awards 12 awards 0.1% awards
2-5
of varying award amounts $11,269,750 $15,000 0.1%
from spring 2021 and 4
awards from fall 2021 terms
33
As used in this table, awards “without data quality issues” means that data on the University’s
electronic spreadsheets indicated compliance with applicable award criteria. Awards “with data quality
issues” means that the spreadsheet data indicated a payment error (student eligibility or award amount)
or had other issues, such as missing data, that made compliance unclear.
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Universe Award Sample Award Sample Coverage Award
Group Description 33
Count and Dollar Count and Dollar Count and Dollar Amount
Stratum Amount Amount (Percent by Stratum)
CRRSAA automated awards
with data quality issues— 348 awards 16 awards 4.6% awards
2-6
randomly selected awards $319,156 $14,156 4.4%
with unclear compliance
CRRSAA application awards
without data quality issues— 184 awards 8 awards 4.3% awards
2-7 randomly selected 4 awards
from each school term (spring $90,750 $4,000 4.4%
and summer 2021)
CRRSAA application awards 8 awards 8 awards 100% awards
2-8 with data quality issues—
selected all awards $4,000 $4,000 100%
ARP automated awards
without data quality issues—
randomly selected 10 awards 6,850 awards 24 awards 0.4% awards
3-9
from each school term (spring $13,465,162 $37,892 0.3%
and summer 2021) and 4
awards from fall 2021 term
ARP automated awards with
data quality issues—randomly 1,510 awards 12 awards 0.8% awards
3-10
selected awards with unclear $2,470,394 $24,000 1.0%
compliance
ARP application awards
without data quality issues—
randomly selected 3 awards 2,800 awards 12 awards 0.4% awards
3-11
from each school term (fall $2,691,613 $11,291 0.4%
2020 and spring, summer, and
fall 2021)
56,079 awards 155 awards 0.3% awards
– Total
$42,074,481 $135,695 0.3%
For the 155 emergency financial aid grants selected, we reviewed student enrollment
and financial information in the University’s student information system to confirm that
students met eligibility requirements and were awarded the correct amount. Where
applicable, we confirmed that the students were enrolled during the award term and
their enrollment status (at least half time or part time) and that they met Title IV
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eligibility requirements (including their EFC). We also confirmed students’ enrollment in
distance education programs and Pell Grant awards, as well as the posting of awards to
student accounts and methods used to disburse grant funds to students. We limited our
review to student eligibility and correct award amount. We did not perform work to
determine how students spent their grant funds or whether the students used the funds
for intended purposes.
Institutional Expenditure Selection and Testing
During our audit period, the University used HEERF Institutional grant funds to
reimburse itself for 48,612 transactions totaling $67.8 million—1,015 transactions
related to lost revenue ($45.4 million) and 47,597 transactions related to the remaining
expenditures ($22.4 million). We used a combination of 100-percent review, stratified
random, and judgmental sampling to select transactions to review. We developed
11 strata and either reviewed all of the expenditures (for 2 strata), used random
sampling, or used a risk-based approach to judgmentally select transactions from each
stratum (for 9 strata).
To develop the strata, we analyzed the universe of expenditures from the University’s
quarterly Institutional expenditure reports and the supporting expenditure data and
created five unique groups based on the reports’ major expenditure categories. Within
each group, we identified subcategories of expenditures based on the University’s
method for determining the expenditure or the type of expenditure, where applicable.
Based on this analysis, we created a stratum for each unique subcategory that applied.
This resulted in a total of 11 strata from which we performed 100-percent review for
2 of the lost revenue strata, randomly selected 58 transactions, and judgmentally
selected 60 transactions from the remaining 9 strata, as summarized in Table 7. Because
there is no assurance that the transactions tested were representative of the universe of
transactions (except where 100-percent review was performed), the results could not
be projected to the untested transactions.
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Table 7. Universe and Sample of Institutional Expenditures, as of September 30, 2021
Sample Coverage
Universe Sample
Transaction
Group Category of Transaction Transaction Selection Method
Count and Dollar
Stratum Expenditure Count and Dollar Count and Dollar
Amount (Percent
Amount Amount
by Stratum)
Lost Revenue
from Academic
and Auxiliary 100% Not applicable—
358 transactions 358 transactions
1-1 Services transactions reviewed all
Sources— $43,720,062 $43,720,062 transactions
100%
Period-over-
Period Variance
Lost Revenue
from Auxiliary 100%
9 transactions 9 transactions Not applicable—
Services transactions
1-2 reviewed all
Sources— $1,561,418 $1,561,418
100% transactions
Waived Parking
Fees
Lost Revenue Selected the highest
from Academic Less than 1% transaction, and
Sources— 648 transactions 5 transactions randomly selected
1-3 transactions
Canceled $141,975 $3,089 4 transactions
Lessons and 2% (3 Lessons and
Performances 1 Performance)
Selected 22 students
with varying housing
Student 4,152 students 25 students 1% students arrangements from
2-4 Refunds—
$5,330,571 $37,770 1% different colleges,
Housing
and randomly
selected 3 students
Student Less than 1% Randomly selected
Refunds—Both 21,396 students 17 students 17 students, at least
2-5 students
Campus Life and $4,124,978 $2,659 2 students from each
General Fees Less than 1% campus
Student Less than 1% Randomly selected
Refunds— 19,004 students 13 students 13 students, at least
2-6 students
General Fees $1,627,675 $1,040 2 students from each
Only Less than 1% campus
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Sample Coverage
Universe Sample
Transaction
Group Category of Transaction Transaction Selection Method
Count and Dollar
Stratum Expenditure Count and Dollar Count and Dollar
Amount (Percent
Amount Amount
by Stratum)
Selected the highest
Operational 229 transactions 2 transactions 1% transactions transaction, and
3-7 Costs—Canceled
$680,432 $50,552 7% randomly selected
Study Abroad
1 transaction
Selected the
4 highest
transactions, a
transaction from
each of the
Operational 10 highest paid
Costs—Campus 1,886 vendors, and
23 transactions 1% transactions
3-8 Safety and transactions 4 transactions from
Telework $2,028,520 36% expenditure types
$5,561,436
Capability not yet selected; and
randomly selected
5 transactions, at
least 2 transactions
for each expenditure
type 34
Selected 14 students
from different
Scholarships— 495 students 25 students 5% students programs with
4-9 Nonresident varying scholarship
Surcharge Fees $3,894,341 $159,896 4% amounts, and
randomly selected
11 students
Selected 2 students
Scholarships— 416 students 6 students 1% students with varying
4-10 Co-operative scholarship amounts,
Education Fee $200,204 $3,434 2% and randomly
selected 4 students
34
The University’s Institutional expenditure data included the following types of expenditures:
(1) coronavirus testing and contract tracing, (2) personal protective equipment, (3) disinfecting,
(4) housing for students in isolation and quarantine, (5) meals for students in isolation and quarantine,
(6) improving telework capabilities, (7) facilitating distance learning, and (8) other services, equipment,
and supplies to prevent the spread of coronavirus.
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Sample Coverage
Universe Sample
Transaction
Group Category of Transaction Transaction Selection Method
Count and Dollar
Stratum Expenditure Count and Dollar Count and Dollar
Amount (Percent
Amount Amount
by Stratum)
Randomly selected
Salaries and 19 transactions 2 transactions 11% transactions 1 Salary and
5-11
Benefits $992,942 $90,089 9% 1 Benefits
transaction 35
48,612
485 transactions 1% transactions
– Total transactions –
$47,658,529 70%
$67,836,034
For the lost revenue transactions for which we performed 100-percent review (Group-
Strata 1-1 and 1-2), we reviewed the University’s lost revenue calculations by comparing
the revenue results to the general ledger accounting records. We determined whether
the revenue sources used were appropriate and analyzed revenue trends to assess the
reasonableness of the revenue amounts.
For the other 118 transactions that we selected (Group-Strata 1-3 through 5-11), we
reviewed supporting documentation such as invoices, authorizations, and justifications
to determine whether the expenditures were allowable and used for purposes intended
under the CARES Act, CRRSAA, and ARP. Specifically, we reviewed each expenditure to
determine whether it was valid, authorized, allowable, allocable, and reasonable under
the CARES Act, CRRSAA, and ARP and in accordance with Uniform Guidance at 2 C.F.R.
part 200 and applicable Department guidance (HEERF FAQs).
Use of Computer-Processed Data
We relied, in part, on computer-processed data from the University’s student
information and accounting systems. We used information in its student information
system on enrollment, attendance, ledger activity (account balances), and other data
necessary to confirm a student’s eligibility to receive an emergency financial aid grant
and that the student received the correct award amount. To assess the reliability of the
data in the accounting system, we compared HEERF fund deposit and disbursement
35
Randomly selected 1 Salary and 1 Benefits transaction and tested 15 employees from each
transaction—5 highest paid employees, 5 highest paid hourly employees, 1 highest paid part-time
employee, and 4 randomly selected employees.
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information recorded in the accounting system to the Department’s G5 system, the
University’s bank statements, and vendor invoices. We did not identify any issues and
concluded that the data in the University’s student information and accounting systems
were sufficiently reliable for the purposes of our audit.
Additionally, we relied on computer-processed data from the University’s electronic
spreadsheets documenting its use of HEERF funds. We used the data to select a sample
of emergency financial aid grant awards and a sample of Institutional expenditures for
testing. We used data on the number and amounts of emergency financial aid awards
and Institutional expenditures to determine whether the University included complete
and accurate information in its quarterly Student Aid and Institutional and annual
performance reports. We also used data on cash receipts and disbursements to
determine whether the University minimized the time between drawing down and
disbursing HEERF funds.
To assess the reliability of the data, we compared student, expenditure, and cash flow
data to information in the University’s student information and accounting systems,
vendor invoices, bank statements, and quarterly Student Aid and Institutional reports.
The information reconciled and we concluded that the data in the University’s electronic
spreadsheets were generally reliable for purposes of our audit. We identified one
exception pertaining to the data quality issues we identified in the spreadsheets listing
the emergency financial aid grants awarded to students, as described in the Sampling
Methodology section above. To mitigate the risk of payment errors stemming from
systemic processing issues or ineffective internal controls that otherwise might not be
detected, we significantly expanded our sample to include awards with data quality
issues.
Internal Controls
We considered only limited aspects of internal controls over compliance with the
applicable Federal requirements to be significant within the context of the audit
objective. Therefore, our assessment of the design of internal controls was limited to
gaining an understanding of the University of Cincinnati’s processes (including controls)
within the context of the individual transactions selected for testing and determining
the underlying cause for identified findings and other matters.
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
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obtained provides a reasonable basis for our findings and conclusions based on our
audit objective.
We performed our audit work remotely from November 2021 through August 2022. We
discussed the results of our audit with University of Cincinnati officials on
August 24, 2022, and provided them with a draft of this report on November 17, 2022.
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Appendix B. Acronyms and Abbreviations
ALN Assistance Listing Number
ARP American Rescue Plan
C.F.R. Code of Federal Regulations
CARES Act Coronavirus Aid, Relief, and Economic Security Act
CRRSAA Coronavirus Response and Relief Supplemental Appropriations
Act
Department U.S. Department of Education
EFC Expected Family Contribution
FAFSA Free Application for Federal Student Aid
FAQ Frequently Asked Questions
GAO Government Accountability Office
HEA Higher Education Act of 1965
HEERF Higher Education Emergency Relief Fund
OIG Office of Inspector General
Pell Federal Pell Grant
SAT Simplified Acquisition Threshold
TIP Temporary Investment Pool
Title IV Title IV of the Higher Education Act of 1965
Uniform Guidance Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards
University University of Cincinnati
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University of Cincinnati Comments
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U.S. Department of Education
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