On March 19, 2021, the U.S. Department of Education (ED) released much-awaited information in a document entitled, “Higher Education Emergency Relief Fund (HEERF I, II, and III) Lost Revenue Frequently Asked Questions.”
All in all, there is some great information in this 6-page document – look especially at the examples on Page 6. However, there is certainly some BGC (Basic Governmental Craziness).
This set of FAQs may be found at:
ED’s “Higher Education Emergency Relief Fund (HEERF) Frequently Asked Questions (FAQ) Rollup Document” (released 11/20/20) basically side-stepped the “lost revenue” issue – and never mentioned “contributions” or “donations” once through the entire 23-page document. The only references to “lost revenue” were in FAQ #43, as follows:
43. Question: How do recipients of section 18004(a)(2) and (a)(3) funds document lost revenues? Do lost revenues relate only to disruption of instruction? Does lost revenue include revenue lost from cancelled summer camps or unused parking lots? Answer: Upon request from the Department, institutions must provide documents demonstrating year-over-year decreases in revenue that are the result of a decline in enrollment, a decline in student fees including housing fees and meal plans, a decline in parking and facilities revenue, or a decline in revenue from summer programs or other activities disrupted by COVID-19. (Supplemental FAQs).
Now, in the “Lost Revenue” FAQs we get confirmation that “lost revenue” is difficult to pin down and “can only be estimated,” as follows:
1. Question: What is lost revenue?
Answer: Generally, lost revenue refers to those revenues an institution of higher education (institution) otherwise expected but were reduced or eliminated as a result of the novel coronavirus 2019 (COVID-19) pandemic. As such, lost revenues can only be estimated.
However, we get the following two FAQs which will tend to cause much more consternation, confusion, and conundrums:
3. Question: What are potential sources of lost revenue that may be reimbursable under the HEERF grant programs?
Answer: Sources of lost revenue associated with the COVID-19 pandemic may include, but are not limited to, the following:
• Academic sources
o Tuition, fees, and institutional charges (including unpaid student accounts receivable or other student account debts)
o Room and board o Enrollment declines, including reduced tuition, fees, and institutional charges
o Supported research
o Summer terms and camps
• Auxiliary services sources
o Cancelled ancillary events
o Disruption of food service
o Dormitory services
o Childcare services
o Use of facilities or venues, including external events such as weddings, receptions, or conferences (other than facilities associated with sectarian instruction or religious worship)
o Bookstore revenue
o Parking revenue
o Lease revenue
o Royalties
o Other operating revenue
4. Question: What are potential sources of lost revenue that are not reimbursable under the HEERF grant programs?
Answer: Sources of lost revenue that are not reimbursable under the HEERF grant programs include the following:
• Capital outlays associated with facilities related to athletics (including fees assessed for capital athletic facility construction)
• Acquisition of real property (including bond revenue)
• Contributions or donations to the institution
• Marketing or recruitment activities
• Revenue related to sectarian instruction or religious worship
• Alcohol sales
• Investment income (including endowment and quasi-endowment revenue)
Generally, lost revenue cannot be used to replace revenues derived from activities and expenditures that are otherwise unallowable under the HEERF grant programs. Please see CRRSAA sections 314(c) and 314(d)(3), 2 CFR part 200 subpart E “Cost Principles,” and 34 CFR §§ 75.532 and 75.533 for additional information.
Okay, it would appear that contributions/donations are not included in “lost revenue” for any HEERF purposes – ouch!
And, then there’s this completely wild concept – Tuition, fees, and institutional charges (including unpaid student accounts receivable or other student account debts) “may be reimbursable,” but, Revenue related to sectarian instruction or religious worship is “not reimbursable” under HEERF grant programs! (#4)
For our schools, "WHERE DO TUITION, FEES, INSTITUTIONAL CHARGES" END AND "SECTARIAN INSTRUCTION" BEGIN?!
And, is it just me or do others have an issue Sectarian instruction and religious worship being equated with alcohol sales?! Film at 11!