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• The KSU Foundation did not remit $31,815 in earned interest to the federal grantor as federally required.
• The KSU Foundation paid itself for administrative costs of $3,689 from grant funds and used $9,600 in grant funds for graduation gifts at KSU's request, which are not allowable uses of this grant.
• Payments to 1,610 registered students of $188.60 per student, an amount selected based on the year the university was founded, were not appropriately calculated since the grant required the amount to be based on financial need.
• As of August 29, 2022, the KSU Foundation still had an account balance of $152,928 from the HEERF Student funds. There are insufficient funds in the account to pay all outstanding checks of $141,197 and the interest liability of $31,815 to the federal grantor.

HEERF Institutional Portion – ALN 84.425F

We selected for review $1,864,862 of the $2,366,396 HEERF Institutional Portion transactions posted to the disbursements ledger and noted the following issues:

• Only one of 65 charges to the HEERF Institutional Portion had adequate supporting documentation for the expenditure, leaving $1,859,885 as potential questioned costs.
• Many charges were for credits to student accounts with outstanding balances rather than direct payments to students as required by the grant. Credits to student accounts were posted as “BREDS ON TOP”. Batches were posted to the ledgers, and individual names of students were not recorded in KSU’s accounting system, Banner.

HEERF Historically Black Colleges and Universities (HBCU) Portion- ALN 84.425J

We selected for review $3,120,973 of $6,924,701 examination period HEERF HBCU Portion transactions posted to the disbursements ledger and noted the following issues:

• Revenue loss charged to the grant was not computed according to guidance provided by the grantor. The incorrectly calculated lost revenue projections exceeded known lost revenue by over $688,000.
• Over $100,000 in payments were for charges that occurred prior to the period of availability of the grant.
• Questionable payroll expenses such as:
• Most transactions tested did not have documentation of grant administration approval.
• Documentation was not provided for a payment of $13,761 and the second year of a service contract totaling $31,827.
• oLump sum payment of $30,000 to the Director of Governmental Relations for being the Title III Grant Administrator;
• oOptional retirement payment of $5,244 for executive employee; and
• oAdministrative staff payroll items $2,139.

Governor's Emergency Education Relief Fund (GEER) - ALN 84.425C

The U.S. Department of Education awarded grants to Governors for the purpose of providing local educational agencies (LEAs), institutions of higher education (IHEs), and other education related entities with emergency assistance due to COVID-19 to help address costs associated with the expansion of remote learning and support services, including enhancing the quality of programs,