Education Department accidentally awarded colleges $73M in extra coronavirus aid, watchdog finds

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Dive Brief

  • The U.S. Department of Education mistakenly made available about $73 million extra in federal coronavirus relief money to 24 colleges, a new government watchdog report found.
  • The department’s Office of Inspector General, which reviewed funding disbursements from April 2020 through August 2021, said the Education Department duplicated grants to the institutions, most of which did not accept the money. No grant funding was misspent, the Education Department said.
  • The inspector general said the erroneous grants represented less than 0.1% of the more than 30,000 awards the Education Department made, but that it should still tighten procedures to prevent similar oversights in the future. 

Dive Insight:

Congress provided colleges about $76 billion in federal coronavirus aid in three spending packages. The most recent was the American Rescue Plan, passed in March 2021, which provided roughly $40 billion for colleges.

This funding was key in helping keep colleges financially afloat amid the pandemic. It also insulated state budgets during the economic crunch and likely prevented lawmakers from drastically cutting public higher education spending. 

However, the Education Department’s methods of sending the money to colleges have sometimes proven flawed. 

The U.S. Government Accountability Office, a Congressional watchdog, in July 2021 said the Education Department had not “effectively designed and implemented procedures” for identifying improper grant awards. The GAO reviewed more than 4,700 colleges’ funding and estimated about 5% of institutions had been given more aid than originally allocated. 

The errors occurred in part because the Education Department was relying on existing staffing levels and policies to distribute the aid, the GAO said at the time.

The Office of Inspector General’s report not only evaluated the grants, but also the Education Department’s response to the GAO analysis. 

While Education Department officials said the agency was continuously improving its procedures, the inspector general said the department had not written up policies for identifying and fixing duplicated grants, or for documenting which colleges had received them. 

The inspector general’s review of federal grant data identified 24 institutions that had been awarded about $73 million in the form of 25 duplicative grants. 

It determined 15 of the institutions had each submitted two applications for a pot of money, and the Education Department had approved both, resulting in the duplicated grants. Nine of the colleges only filed one application for funding, but the department still provided two grants. 

At the time of the inspector general’s review, most of the colleges, 16, had not drawn on the extra funding. Three of the institutions took about $600,000 from the duplicated grants but returned the funds about four to eight months later.

Three colleges drew about $3 million from the incorrect funding source but did not collect from another pot of the aid, and so ultimately received the correct amount of money. Two colleges had taken, but not spent, more than $1 million in error. 

The inspector general recommended the department create written procedures to prevent future missteps and conduct quality assurance reviews of funds that have already been sent. 

Michelle Asha Cooper, acting assistant secretary for postsecondary education, agreed with the recommendation in a written response to the inspector general last month.

Cooper noted the department was aware of all but one of the incorrect grants that the inspector general had identified. She wrote the Education Department had to develop the program to distribute the grants while simultaneously awarding them, all while “navigating the national emergency with limited staff and resources.”

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