Report 2021-611 Recommendation 18 Responses

Report 2021-611: Higher Education Emergency Relief Fund: Some University Campuses Did Not Maximize Available Federal Pandemic Funds, and They Prioritized Students Differently When Awarding Relief Funds (Release Date: November 2021)

Recommendation #18 To: University of California, San Diego

To maximize the available HEERF funds, UC San Diego should review expenses it incurred in response to the pandemic since January 2020 and submit all eligible expenses to FEMA for reimbursement. The campus should reallocate any HEERF funds initially spent for these expenses to other purposes, such as replacing lost revenue or providing additional student aid.

UCSD has submitted to the CSA all project worksheets which have been submitted to FEMA for reimbursement, which include Wastewater Testing (Project 691680), Diagnostic Testing (Project 696380), in addition to previously provided FEMA Claims for Vaccination Administration (668425) and Quarantine Housing (670251). This documentation contains transaction-level detail of expenditures submitted to FEMA for reimbursement. We also have provided analysis of pandemic-related expenses are eligible, for FEMA reimbursement. Based on the above, UCSD considers this recommendation to be fully implemented.

California State Auditor's Assessment of Status: Fully Implemented

UC San Diego provided its worksheets and analysis of its pandemic-related expenses, and its determination of which costs are eligible for FEMA reimbursement.

UCSD has submitted to the CSA all project worksheets which have been submitted to FEMA for reimbursement, which include Wastewater Testing (Project 691680), Diagnostic Testing (Project 696380), in addition to previously provided FEMA Claims for Vaccination Administration (668425) and Quarantine Housing (670251). This documentation contains transaction-level detail of expenditures submitted to FEMA for reimbursement. We also have provided analysis of pandemic-related expenses are eligible, for FEMA reimbursement. Based on the above, UCSD considers this recommendation to be fully implemented.

California State Auditor's Assessment of Status: Fully Implemented

UC San Diego provided its worksheets and analysis of its pandemic-related expenses, and its determination of which costs are eligible for FEMA reimbursement.

UCSD has evaluated the $4,359,000 identified in the CSA Audit that was previously reimbursed against HEERF, in consultation with consultant Disaster Recovery Services (DRS), to determine if any would be eligible for submission to FEMA. These expenses were reimbursed using HEERF I grant funding. The HEERF I grant to UCSD was closed May 5, 2021 prior to the issuance of the Federal Register Notice dated April 4, 2022, which provided an automatic extension for all open grants issued under HEERF. The Federal Register Notice stated that "Accordingly, the Department is extending the performance period on all HEERF grants through June 30, 2023. This extension does not apply to grants that are closed or in the closeout process, nor does it apply to grants that have an award balance of $1,000 or less." Because the HEERF I grant to UCSD has expired and was not extended, DRS and our external auditors have advised UCSD that the $4,359,000 that was previously reimbursed against HEERF cannot be reallocated to FEMA.

Since our last update, UCSD has evaluated the spending noted in the audit that was originally planned for HEERF, and submitted to FEMA eligible expenses on Project Worksheets for Vaccine Administration (Project Worksheet 3) and Quarantine Activities (Project Worksheet 4). Further, UCSD has identified all FEMA eligible expenses related to COVID Testing and DRS is using this to complete the Project Worksheet for submittal to FEMA. Supporting documentation will be provided.

UCSD is committed to seeking reimbursement of future pandemic related expenses through the FEMA process, to the extent possible and allowable under FEMA. HEERF funding will not be used to reimbursement UCSD for future pandemic related costs that can otherwise be reimbursed by FEMA.

Based on the above, UCSD considers this recommendation to be fully implemented.

California State Auditor's Assessment of Status: Partially Implemented

UCSD identified the amounts of its pandemic-related expenses that it believes are eligible, ineligible, or of undetermined eligibility for FEMA reimbursement. However, it is not clear which of these costs it will submit for FEMA reimbursement. We look forward to reviewing UCSD's reimbursement requests after they are submitted to FEMA.

UCSD has taken a comprehensive approach to evaluating COVID related expenditures for FEMA eligibility and submitting for reimbursement when deemed appropriate and compliant. As the word of public assistance funding became available, UCSD began to identify broad categories of COVID-19 expenditures that were potentially eligible for FEMA reimbursement. Once a category was identified, the general ledger transactions were downloaded and provided to a third-party contractor, Disaster Recovery Services (DRS), for review to determine if the expenses would be eligible for FEMA reimbursement. DRS reviewed each line item of the UCSD report and, in accordance with federal regulations, applied FEMA policy and guidance. We believe that the approach was effective for identifying expenditures that were potentially reimbursable under FEMA and seeking reimbursement in a timely manner.

The audit identified $4,359,000 in HEERF funds that had been spent on expenditures that were potentially FEMA eligible, and $36,318,000 in planned HEERF spending on expenditures that were potentially FEMA eligible. UCSD has re-evaluated the $36,318,000 in planned HEERF spending and have reallocated those funds for submittal to FEMA for reimbursement, where appropriate. Specifically, UCSD has incorporated these expenditures into Project Worksheets that have been submitted to FEMA relating to quarantine housing (approximately $4 million), and will be incorporating the remaining planned expenditures into Project Worksheets relating to Vaccination Costs (approximately $1.4M) and COVID Testing and Wastewater monitoring (potentially $46M). UCSD has provided the expenditure detail supporting the $4,359,000 that was previously reimbursed against HEERF to DRS to determine if any would be eligible for reallocation to FEMA. Results of this review will be available in the next 90-day update.

California State Auditor's Assessment of Status: Pending

We look forward to reviewing UC San Diego's analysis of its pandemic-related expenses.

UCSD continues to actively work with campus departments to gather the supporting documentation (purchase orders, invoices, proof of payment) on Project Worksheets for Vaccination Costs and Quarantine Housing for students. Two additional pools of expenses are being reviewed for FEMA eligibility by the campus in consultation with Disaster Recovery Services, which will include expenses related to COVID Testing and Wastewater monitoring. The Department of Education issued an automatic extension of HEERF grantees' performance period, extending the deadline to use HEERF funding through June 30, 2023

California State Auditor's Assessment of Status: Pending

We look forward to reviewing UC San Diego's analysis of its pandemic-related expenses, its determination of which costs are eligible for FEMA reimbursement, and documentation of its claims for reimbursement or an explanation for why it is not feasible to submit them.

UCSD is actively working with campus departments to gather the supporting documentation (purchase orders, invoices, proof of payment) on two Project Worksheets for Vaccination Costs ($3.1M) and Quarantine Housing for students ($2.6M). The next two pools of expenses are being reviewed for FEMA eligibility by the campus in consultation with Disaster Recovery Services, which will include expenses related to COVID Testing and Wastewater monitoring (potentially $46M). UCOP requested a HEERF/FEMA plan update from each campus, which UCSD provided on February 11, 2022. UCOP plans to compile the information and share with campuses in March 2022.

UCSD has also contacted its HEERF Program & Management Analyst to request a No Cost Extension to extend the deadline to submit claims to May 2023. The HEERF Program & Management Analyst has instructed UCSD to submit a justification letter by the end of March 2022, and this letter is in process as of the date of this update

California State Auditor's Assessment of Status: Pending

UC San Diego describes a number of steps it has taken to identify costs incurred in response to the pandemic and its attempts to obtain FEMA reimbursement. However, it is not clear whether the campus is reviewing all pandemic-related expenses or only those related to certain projects or purposes. To ensure that it maximizes the federal funds it receives for responding to the COVID-19 pandemic, the campus should thoroughly review all of its actual and planned pandemic related expenses, determine which are eligible for FEMA reimbursement, and submit claims for those expenses. We look forward to reviewing documentation of the steps that UC San Diego takes to ensure it submits eligible HEERF expenditures to FEMA for reimbursement.

All Recommendations in 2021-611

Agency responses received are posted verbatim.