State Audit: Federal Pandemic Relief Offered UCs, CSUs Millions In Aid, But They Didn't Make The Most Of It

A new report from the California state auditor has found that some public universities did not make the best use of federal pandemic relief funds.

To help colleges survive the pandemic, Congress enacted three laws between March 2020 and March 2021. Combined, they provided billions of dollars for the Higher Education Emergency Relief Fund (HEERF), which universities have used to defray pandemic-related expenses and provide additional aid for students. The CSU and UC systems received $4.4 billion in relief.

On top of those funds, the Federal Emergency Management Agency (FEMA) changed its criteria, making more university expenses eligible for reimbursement.

The report reviewed the expenditures and student aid allocation decisions at six universities: UC Merced, UC Riverside, UC San Diego, CSU Chico, CSU Long Beach and CSU Sonoma.

The audit found that most of those universities used HEERF money for expenses that were already eligible for reimbursement from FEMA, such as personal protective equipment and temporary medical facilities. Ultimately, this reduced the amount of HEERF money left available for things like student grants, which were not eligible for such reimbursement.

Submitted by California State Auditor Elaine Howle, the report identified $47 million in actual and planned spending at four of the six campuses that could be submitted to FEMA. Doing so, wrote Howle, would enable those campuses to use HEERF funds to defray lost revenue or provide more aid for students.

CSU Long Beach, for instance, spent $2.8 million in HEERF funds to establish a temporary medical tent, conduct COVID‑19 testing, administer vaccines and defray other pandemic-related costs. According to the report, the campus has earmarked more than $2.3 million of its remaining HEERF aid for similar expenses. All of these are potentially reimbursable by FEMA.

The auditor also noted that the UC Board of Regents recently approved a tuition increase for all its campuses and that incoming 2022 students will pay about $534 more each year in tuition and fees than current students. At UC San Diego, Howle added, the actual and planned HEERF expenditures that appear to be eligible for FEMA reimbursement is over $40 million.

To put this into perspective, she wrote, “we estimate that these funds would be the equivalent of the planned $534 tuition increase of all four years of education for two classes of 9,000 entering freshmen.”

Money Left Unspent

In Howle’s view, the millions of dollars in potential FEMA reimbursements that campuses have not claimed suggest that CSU and UC management need to take “a more proactive role in ensuring that campuses obtain these federal funds and use them to minimize or mitigate rising student costs.”

“It’s absurd to leave money on the table,” said William Tierney, professor emeritus at USC’s Pullias Center for Higher Education, in an email.

Tierney, who’s an expert on policy analysis, governance and administration, also said he was “not surprised” to hear that people quarantined at home “didn’t know how to spend all the money.”

When auditor Howle presented her findings to the campuses that failed to apply for reimbursements, they agreed to consider submitting claims to FEMA. However, some campuses also said that they’d hesitated to apply because the agency can often take long to respond.

“Our campus was not hopeful [that] we would receive much reimbursement, especially in a timely fashion,” wrote Juan Sánchez Muñoz, who serves as chancellor at UC Merced.

“The need for quick relief and availability of HEERF funds provided campus leadership a clear decision on how to use HEERF institutional funds on our campus,” he added.

CSU Chico’s associate vice president for financial services likewise signaled that the campus submitted two claims to FEMA in 2020 for pandemic expenses and is still awaiting a decision.

Inconsistent Student Aid

Aside from not applying for reimbursements, the report also found that campuses did not distribute student aid consistently.

The six institutions in the report generally provided grants through an application process where students could request funds for specific pandemic‑induced needs and/or issued automatic grants to students with certain characteristics. But the CSU and UC campuses didn't go about this in a uniform manner. UC Merced, for example, established four award levels and prioritized foster youth. In contrast, UC Riverside established five levels and prioritized students who are parents.

Campuses also processed applications for student aid inconsistently, leading to similar requests being approved at one campus and rejected at another.

The campuses under review at the CSU and UC systems were not legally required to distribute student grants the same way. Still, the report suggests that management should provide additional guidance to prevent inconsistencies between campuses in the future.

Tierney, the professor at USC, doesn’t fully agree.

“I don’t think that different campuses automatically have to spend monies in the exact same way,” he wrote. “Generally, it’s better to let those closest to the action determine how to spend money.”

“Having said that,” he added, “ I do think campuses that make students jump through lots of hoops — not only ask for the money but also write something (that no one is likely to read, much less verify) — is a waste of time and energy.”