President Joe Biden signed the American Rescue Plan Act of 2021 into law in March, including nearly $40 billion for higher education institutions. This latest round of funding is the third installment of the Higher Education Emergency Relief Fund, and ARP HEERF III aid comes with some new requirements.
Although ARP HEERF III requires that 50 percent of all nonprofit higher education institutions’ funding be spent on student tuition, a portion can still cover a broad range of “technology costs associated with a transition to distance education.”
Does that mean universities and colleges can spend their federal dollars on any technology associated with online learning? Not exactly.
Grace Gonzalez, a certified public accountant and partner at the Bonadio Group who specializes in accounting and auditing, discussed the eligibility nuances with EdTech: Focus on Higher Education.
EDTECH: What are the new requirements that colleges and universities should be mindful of?
GONZALEZ: The new HEERF III funding offers various updated eligibility requirements for both the student and institutional portions of the funding.
To be considered for emergency grants, students are no longer required to be Title IV eligible. Practically speaking, this means undocumented and international students are now eligible too.
The grants are available to students who were enrolled on or after March 13, 2020. These students may have faced unexpected expenses, loss of employment, reduced income and food or housing insecurity as a result of the pandemic.
Additionally, students who are exclusively enrolled in distance education are eligible for emergency grants under HEERF III. (This was actually included as part of the earlier Coronavirus Response and Relief Supplemental Appropriations Act of 2021.)
The institutional portion may be used to monitor and suppress COVID-19 in a way that is in accordance with public health guidelines. This includes providing PPE to students, faculty and staff; cleaning and disinfection; redesigning food service facilities; enhancing ventilation, etc. As with previous rounds of HEERF funding, the institutional portion may also be used to offset lost revenue.
GONZALEZ: One-to-one device or laptop programs will continue to be considered eligible expenses, but only to the extent that institutions can show a clear nexus to COVID-19 and the transition to distance education. It is important that an institution be able to clearly document why the cost of one-to-one devices or laptops is reasonable and justified.
To ensure that federal dollars are used prudently, the 2018 Yellow Book regulatory guidance includes an additional focus on waste and abuse. Keep in mind that auditors consider waste and abuse when reviewing how the institution is spending its allocated federal dollars.
To that point, institution leaders must carefully document their considerations, especially when it comes to the price of the devices.
RELATED: Here are 4 tips for creating better one-to-one device programs.
EDTECH: Can you give a specific example of what constitutes good documentation that the price of a laptop or device is justified?
GONZALEZ: At a very high level, one should be able to demonstrate the price is comparable in the market. For instance, one should obtain multiple price comparisons from an adequate number of qualified sources and show how the laptop price paid with federal dollars is comparable and reasonable.
If the price is much higher than the comparable market options, one should explain why it is still considered prudent and reasonable. For example, does the student have special needs that require additional hardware or software?
For example, is a $10,000 laptop a reasonable expense for most students? The presumption would be that the cost is too high, in light of the laptop functions that most students should need.
EDTECH: Can you give an example of poor documentation that an auditor might interpret as wasteful spending?
GONZALEZ: As mentioned above, if an institution used federal funds to pay $10,000 for a laptop when the average price of an off-the-shelf laptop is $1,500, and there is no documentation retained to substantiate why the $10,000 price paid was prudent and justified, it may be considered an inadequate or wasteful use of federal funds.
But keep in mind that federal guidelines are not black and white. A $10,000 laptop may be appropriate in specific instances, depending on what it is being used for and what the individual user’s needs are.
EDTECH: Would investments in data analytics programs that offer insights on social distancing, mobile apps that track COVID-19 spread, sanitation drones and infrared sensors qualify for federal funding?
GONZALEZ: These examples are not specifically discussed in the Department of Education’s guidance. However, the DOE’s FAQ includes some guiding principles which should be taken into consideration as well as links to the Centers for Disease Control and Prevention’s guidance. Overall, the nature of the examples mentioned in this question appears reasonable and consistent with the spirit of the new DOE requirements. As always, documentation is key.
The institution should retain documentation that considers various points — including why covering these expenses with HEERF III dollars meets the new requirement to “monitor and suppress,” and what factors were considered when determining the costs associated with these investments are prudent and reasonable.
RELATED: Learn more about emerging techs for tracking COVID-19 in higher ed.