The objective of our audit was to determine whether the Department designed and implemented processes to provide reasonable assurance that it awarded and monitored grantees’ uses of disaster recovery funds in accordance with the Bipartisan Budget Act; “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,” 2 Code of Federal Regulations (C.F.R.) Part 200 (Uniform Guidance); and Department policy.
The Department’s processes were designed in accordance with applicable law, regulations, and Department policies, but were not all were implemented. This resulted in the Department improperly awarding more than $242,200 to about 27 percent of the grantees whose applications we reviewed. This included grants to (1) an ineligible grantee, (2) an applicant that identified itself as both the postsecondary school receiving displaced students and the postsecondary school affected by the disaster, (3) an applicant who omitted the required displaced student data on the postsecondary school from which the student was displaced, (4) two applicants whose applications included unallowable costs, (5) an applicant who received approval for an indirect cost rate that was more than the allowable rate; and (6) one applicant for an amount greater than the applicant requested. In addition, the Department did not have reasonable assurance that grantees used grant funds only for allowable, reasonable, and necessary activities.
We made five recommendations, including that the Department take appropriate actions to correct the improper awards and review the applications that were not part of our audit and take appropriate actions to correct any instances of unallowable, unreasonable, or unnecessary activities or items.
Oversight and Monitoring—Grantees
See additional OIG work involving this subject on our Disaster Recovery page.