Higher Education Emergency Relief Funds (HEERF) Reminder
On October 2, 2020 the Department of Education (ED) released the 3rd Round of Frequently Asked Questions and Question 9 is of particular concern, although it specifically refers to the Student Aid Portion of the HEERF funds, it would apply to both the student and institutional grants.
- Question: Do all of the requirements in the Uniform Administrative Requirements, Cost Principles, And Audit Requirements For Federal Awards (the “Uniform Guidance,” at 2 CFR part 200) apply to the HEERF grants?
Answer: Yes. The Department has consistently held that grant funds awarded under the HEERF are subject to the requirements of the Uniform Guidance in 2 CFR part 200. Notice of the applicability of these provisions was provided in the Certification and Agreement documents that all grantees affirmatively signed prior to submitting their requests for funding, as well as in each Grant Award Notice (GAN).
- Question: My institution drew down the full amount of its Student Aid Portion allocation under section 18004(a)(1) soon after it was made available. However, we have not been able to fully distribute the emergency financial aid grants to students as quickly as planned. Does my institution need to refund the portion not yet spent?
Answer: In accordance with 2 CFR § 200.305(b) of the Uniform Guidance, which applies to the HEERF grants, grantees must seek to minimize the time between drawing down funds from the G5 system and applying those funds to support a grant award’s activities. Consistent with this requirement, grantees must maintain grant funds in interest-bearing accounts, and any interest earned on grant funds above $500 per year must be remitted to the Federal government. Therefore, the Department encourages grantees to establish a distribution plan prior to an initial draw down of grant funds. In addition, we urge grantees to only draw down the minimum amount of grant funds necessary, and where the grant funds are able to be applied promptly to each HEERF grant’s purposes. Based on the circumstances described above, an institution should refund any portion of the HEERF award that it does not have an immediate ability to expend on emergency financial grants to students, until the institution has a plan for the orderly distribution of the remainder of the funds. It can then be re-drawn from the institution’s account in G5. (Round 3 FAQs)
Based on the questions and answers given above, the school is required to hold the HEERF funds in an interest bearing account (but if the funds were immediately disbursed, this should not be an issue). If your school has not done so already, you may have to change to an interest bearing account.
If more than $500 was earned in interest on these funds, the overage must be submitted to ED.
Since the institution has a year from the time the award was issued and the institution has not already spent all of the funds drawn down, funds not yet disbursed (unless there are immediate plans for its use) should be returned to the grant program, and drawn down again when needed.
Funds would be returned in the same manner they were requested. FAME processing clients must:
- Create a ticket through the FAME’s Help Center
- Provide school information
- GANS account number for student grant funds or institutional grant funds
- Amount to be returned
Just a reminder, if the return of funds results with a zero balance, you will need to deposit some institutional funds to keep the account open.
For a summary of all of the HEERF Frequently Asked Questions, ED released a Higher Emergency Relief Fund (HEERF) FAQ Rollup Document on October 14, 2020 https://www2.ed.gov/about/offices/list/ope/heerffaqsoct2020rollup.pdf.
Does the institution submit the interest back as a refund to G5 (to the corresponding HEERF award) or does the interest need to be submitted to HHS, like it is with Title IV funds? How often should the interest be remitted, i.e., monthly, quarterly, or at the end of the year?