Audit 13921

FY End
2023-06-30
Total Expended
$872,601
Findings
4
Programs
6
Year: 2023 Accepted: 2024-01-26

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
10285 2023-003 Material Weakness - C
10286 2023-004 Material Weakness Yes L
586727 2023-003 Material Weakness - C
586728 2023-004 Material Weakness Yes L

Contacts

Name Title Type
DG4EJBS533C5 Susan Barger Auditee
8147655308 John Compton Auditor
No contacts on file

Notes to SEFA

Title: 3. Federal Student Loan Programs Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. The underlying accounting records for some grant programs, primarily those involving governmental activities (i.e., General Fund), are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. De Minimis Rate Used: N Rate Explanation: The Center has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The total loans granted under the Federal Direct Student Loans Program, which were not made by the College but were received by its students, were approximately $7,342,000 for the year ended May 31, 2023. The total loans outstanding under the Federal Perkins Loan Program were approximately $134,000 for the year ended May 31, 2023.
Title: 4. Major Programs Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. The underlying accounting records for some grant programs, primarily those involving governmental activities (i.e., General Fund), are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. De Minimis Rate Used: N Rate Explanation: The Center has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The amount expended under the Center's major programs totaled approximately $545,000, which is approximately 62% of total expenditures of federal awards for the year ended June 30, 2023. Federal awards expenditures for purposes of this calculation includes loans administered under the Federal Direct Student Loan Program during the year ended June 30, 2023.
Title: 6. Adjustments Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. The underlying accounting records for some grant programs, primarily those involving governmental activities (i.e., General Fund), are maintained on the modified accrual basis of accounting. Under the modified accrual basis, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when the liability is incurred. De Minimis Rate Used: N Rate Explanation: The Center has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Center derecognized $69,999 of CARES Act revenue previously recognized as federal sources revenues in fiscal 2021-22, during the 2022-23 year, as it determined it did not meet the grant requirements in 2021-22. In addition, the Center had drawn down the remainder of this grant funding during fiscal 2023, and so $69,999 is recorded and included as accounts payable on the statement of net position to be returned to the U.S. Department of Education (DOE) and is reflected as deferred revenue at June 30, 2023 on the schedule of expenditures of federal awards. The Center has received an extension from DOE through December 31, 2023 and has since met the grant requirements for recognition prior to the extension lapsing. The deferred revenue will be recognized in fiscal 2023-24. See more information in Note 9 to the financial statements.

Finding Details

Criteria: The tracking and matching of grant revenues and expenditures and the related grant receivable and unearned revenue amounts is necessary to assist in making management decisions and for the proper reporting and use of such funds in accordance with each of the individual grant requirements and this information is essential for grant administration and for preparing the Center's Schedule of Expenditures of Federal Awards (SEFA). Condition/Context: The Higher Education Emergency Relief Fund (HEERF) Institutional Portion grant was funded under the reimbursement method where costs for which reimbursement was requested are to be eligible to be reimbursed for or paid for prior to the date of the reimbursement request. During the year, the Center drew down $69,999 prior to being eligible to be reimbursed for these costs. One of the two draws tested did not comply with requirements. Effect: The Center has worked with the U.S. Department of Education for purposes of determining whether the $69,999 should be returned and was instructed that it should not be returned, but that the quarterly and annual reporting that included these costs were incorrectly filed and should be revised. The Center also did not prepare a complete and accurate SEFA in a timely manner to comply with its financial reporting requirements. Cause: The Center has not prioritized a formal system for tracking its grant activities and also lacked a complete and accurate understanding of grant funding under the reimbursement method. Questioned Costs: $69,999 Recommendation: We recommend that the Center develop and implement a formal system for tracking its grant related activities including the review and approval of grant reports and draw down requests reconcile to the general ledger grant activity or eligible costs prior to submitting a reimbursement request or grant report. Views of Responsible Officials and Planned Corrective Actions: Management agrees, and is working to realign the grant process from formalizing the administration and determining the involvement of staff members. A timeline will be initiated between all involved staff to oversee, track, report and manage all of the Center's grant awards. Timeline will ensure that budgets, reporting requirements and purchases are handled in a timely manner. Management is also revising the quarter ending September 30, 2022 report and the 2022 annual report and working with the U.S. Department of Education regarding the resolution of this matter. See Corrective Action Plan.
Criteria: Section 18004(e) of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), directed institutions receiving funds under Section 18004 of the Act, to submit a new, separate form covering aggregate amounts spent for HEERF I, HEERF II and HEERF III funds each quarterly reporting period (September 30, December 31, March 31, June 30), concluding after an institution has expended and liquidated all (a)(1) Institutional Portion, (a)(2) and (a)(3) funds and checks the "final report" box. Condition/Context: The Center posted two inaccurate reports to their website, including the Quarterly Budget and Expenditure Reporting under CARES Act Sections 18004(a)(1) Institutional Portion, 18004(a)2), and 18004(a)(3) reports covering the quarter ending September 30, 2022 and the 2022 HEERF Annual Report. The two reports tested did not comply with requirements. Effect: The Center did not provide the public with accurate and reliable data related to the 18004 (a)(3) funds. Cause: The Center did not report the correct amounts on the reports covering the quarter ending September 30, 2022 and the 2022 HEERF Annual Report. Questioned Costs: Not applicable. Recommendation: The Center should assign an individual to monitor reporting requirements of awards to ensure the Center is in compliance. In addition, the Center will need to submit updated reports to reflect accurate presentation of the information. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. While the Center did not provide the public with accurate data, the Center believed it had filed the reports correctly at the time. Since the finding was identified during the audit, the Center plans to submit the revised reports stated above. See Corrective Action Plan.
Criteria: The tracking and matching of grant revenues and expenditures and the related grant receivable and unearned revenue amounts is necessary to assist in making management decisions and for the proper reporting and use of such funds in accordance with each of the individual grant requirements and this information is essential for grant administration and for preparing the Center's Schedule of Expenditures of Federal Awards (SEFA). Condition/Context: The Higher Education Emergency Relief Fund (HEERF) Institutional Portion grant was funded under the reimbursement method where costs for which reimbursement was requested are to be eligible to be reimbursed for or paid for prior to the date of the reimbursement request. During the year, the Center drew down $69,999 prior to being eligible to be reimbursed for these costs. One of the two draws tested did not comply with requirements. Effect: The Center has worked with the U.S. Department of Education for purposes of determining whether the $69,999 should be returned and was instructed that it should not be returned, but that the quarterly and annual reporting that included these costs were incorrectly filed and should be revised. The Center also did not prepare a complete and accurate SEFA in a timely manner to comply with its financial reporting requirements. Cause: The Center has not prioritized a formal system for tracking its grant activities and also lacked a complete and accurate understanding of grant funding under the reimbursement method. Questioned Costs: $69,999 Recommendation: We recommend that the Center develop and implement a formal system for tracking its grant related activities including the review and approval of grant reports and draw down requests reconcile to the general ledger grant activity or eligible costs prior to submitting a reimbursement request or grant report. Views of Responsible Officials and Planned Corrective Actions: Management agrees, and is working to realign the grant process from formalizing the administration and determining the involvement of staff members. A timeline will be initiated between all involved staff to oversee, track, report and manage all of the Center's grant awards. Timeline will ensure that budgets, reporting requirements and purchases are handled in a timely manner. Management is also revising the quarter ending September 30, 2022 report and the 2022 annual report and working with the U.S. Department of Education regarding the resolution of this matter. See Corrective Action Plan.
Criteria: Section 18004(e) of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), directed institutions receiving funds under Section 18004 of the Act, to submit a new, separate form covering aggregate amounts spent for HEERF I, HEERF II and HEERF III funds each quarterly reporting period (September 30, December 31, March 31, June 30), concluding after an institution has expended and liquidated all (a)(1) Institutional Portion, (a)(2) and (a)(3) funds and checks the "final report" box. Condition/Context: The Center posted two inaccurate reports to their website, including the Quarterly Budget and Expenditure Reporting under CARES Act Sections 18004(a)(1) Institutional Portion, 18004(a)2), and 18004(a)(3) reports covering the quarter ending September 30, 2022 and the 2022 HEERF Annual Report. The two reports tested did not comply with requirements. Effect: The Center did not provide the public with accurate and reliable data related to the 18004 (a)(3) funds. Cause: The Center did not report the correct amounts on the reports covering the quarter ending September 30, 2022 and the 2022 HEERF Annual Report. Questioned Costs: Not applicable. Recommendation: The Center should assign an individual to monitor reporting requirements of awards to ensure the Center is in compliance. In addition, the Center will need to submit updated reports to reflect accurate presentation of the information. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. While the Center did not provide the public with accurate data, the Center believed it had filed the reports correctly at the time. Since the finding was identified during the audit, the Center plans to submit the revised reports stated above. See Corrective Action Plan.