Sneak Preview: ED Takes Steps To Tackle Backlog of HEERF Audits

(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The Department of Education (ED) Office of Finance and Operations (OFO), in response to a recommendation in a recent ED Office of Inspector General (OIG) report, has requested additional funding to maintain sufficient staffing resources to resolve a backlog of Higher Education Emergency Relief Fund (HEERF) audits.

HEERF is one of multiple emergency relief funds created under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136) to assist institutions of higher education adversely impacted by the COVID-19 pandemic. ED provided more than $76 billion in HEERF grants to more than 4,900 schools. Recipients of HEERF grant awards that met certain conditions were required to submit annual independent audits to ED. OIG assessed the status of ED’s audit resolution activities, along with the agency’s audit resolution staffing levels, from April 2020 through June 2023.

OIG found that the number of audits with HEERF-related findings that required resolution by OFO’s Grants Risk Management Services Division (GRMSD) increased significantly over the past few years, and GRMSD deemed many of these findings “complex.” However, the number of GRMSD staff assigned to audit resolution activities remained relatively constant during this same period, which resulted in a more than fourfold increase in the number of audits assigned for resolution per GRMSD audit staff. According to the report, GRMSD’s staffing capacity was established in federal fiscal year (FY) 2020 to provide audit resolution services for an anticipated volume of HEERF audits, but the volume and complexity of the audits increased significantly over time.

“GRMSD is now facing a significant backlog of outstanding HEERF audits requiring resolution, and without immediate action, the timeliness and effectiveness of the resolution of HEERF audit findings could be reduced,” OIG explained.

For example, while GRMSD assigned 112 audits to staff for resolution in FY 2020, it began receiving HEERF-related audits starting in FY 2021, and the number of audits requiring resolution sharply increased to 497 by June 2023. Additionally, the number of audits assigned to staff that were not resolved also increased sharply. By June 2023, GRMSD staff were still attempting to resolve more than 300 audits, and the audit resolution period for about 125 of these audits was overdue. Federal agencies are required to issue a management decision within six months after the audit report is submitted to the Federal Audit Clearinghouse (§200.521(d)).

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