Audit 178653

Condition: A material prior period adjustment was proposed and recorded by management to correct the recording of the Perkins and HPSL liabilities and net assets. Criteria: Guidance from the U.S. Department of Education required that Perkins and HPSL transactions be recorded in a specific way as well as generally accepted accounting principles. Cause: Management did not have procedures in place to ensure the Perkins and HPSL transactions were properly recorded. Effect: Beginning net assets were materially overstated and liabilities were materially understated by approximately $9,293,758. Recommendation: We recommend that policies and procedures are implemented to ensure that adjustments to the estimated liabilities due to the federal government for the Perkins and HPSL loan programs are properly recorded in a timely manner. Management?s Response: We agree with the adjustment and will implement the necessary procedures to ensure that similar transactions are recorded properly.

Condition: A material prior period adjustment was proposed and recorded by management to correct the recording of the Perkins and HPSL liabilities and net assets. Criteria: Guidance from the U.S. Department of Education required that Perkins and HPSL transactions be recorded in a specific way as well as generally accepted accounting principles. Cause: Management did not have procedures in place to ensure the Perkins and HPSL transactions were properly recorded. Effect: Beginning net assets were materially overstated and liabilities were materially understated by approximately $9,293,758. Recommendation: We recommend that policies and procedures are implemented to ensure that adjustments to the estimated liabilities due to the federal government for the Perkins and HPSL loan programs are properly recorded in a timely manner. Management?s Response: We agree with the adjustment and will implement the necessary procedures to ensure that similar transactions are recorded properly.

Condition: A material prior period adjustment was proposed and recorded by management to correct the recording of the Perkins and HPSL liabilities and net assets. Criteria: Guidance from the U.S. Department of Education required that Perkins and HPSL transactions be recorded in a specific way as well as generally accepted accounting principles. Cause: Management did not have procedures in place to ensure the Perkins and HPSL transactions were properly recorded. Effect: Beginning net assets were materially overstated and liabilities were materially understated by approximately $9,293,758. Recommendation: We recommend that policies and procedures are implemented to ensure that adjustments to the estimated liabilities due to the federal government for the Perkins and HPSL loan programs are properly recorded in a timely manner. Management?s Response: We agree with the adjustment and will implement the necessary procedures to ensure that similar transactions are recorded properly.

Condition: A material prior period adjustment was proposed and recorded by management to correct the recording of the Perkins and HPSL liabilities and net assets. Criteria: Guidance from the U.S. Department of Education required that Perkins and HPSL transactions be recorded in a specific way as well as generally accepted accounting principles. Cause: Management did not have procedures in place to ensure the Perkins and HPSL transactions were properly recorded. Effect: Beginning net assets were materially overstated and liabilities were materially understated by approximately $9,293,758. Recommendation: We recommend that policies and procedures are implemented to ensure that adjustments to the estimated liabilities due to the federal government for the Perkins and HPSL loan programs are properly recorded in a timely manner. Management?s Response: We agree with the adjustment and will implement the necessary procedures to ensure that similar transactions are recorded properly.