Audit 28034

FY End
2022-05-31
Total Expended
$16.08M
Findings
2
Programs
8
Organization: Chowan University (NC)
Year: 2022 Accepted: 2022-10-11
Auditor: Bdo USA LLP

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
20321 2022-001 - - N
596763 2022-001 - - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $7.97M Yes 1
84.063 Federal Pell Grant Program $3.25M Yes 0
84.047 Trio_upward Bound $535,227 - 0
84.425 Education Stabilization Fund $287,509 Yes 0
84.007 Federal Supplemental Educational Opportunity Grants $251,628 Yes 0
84.033 Federal Work-Study Program $173,564 Yes 0
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $7,544 Yes 0
84.038 Federal Perkins Loan Program $0 Yes 0

Contacts

Name Title Type
FCHUCAM45V43 Stephanie Furlough Auditee
2523986538 Michael Botzis Auditor
No contacts on file

Notes to SEFA

Title: State Awards Accounting Policies: The accompanying Schedule includes the federal grant transactions of the University recorded onthe accrual basis of accounting. Such expenditures are recognized following the cost principlescontained in the Uniform Guidance, wherein certain types of expenditures are not allowable or arelimited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During fiscal 2022, the University awarded $2,140,494 in North Carolina Need Based Scholarships, which is funding received from the state of North Carolina. Such funds were considered direct and material to the University.
Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying Schedule includes the federal grant transactions of the University recorded onthe accrual basis of accounting. Such expenditures are recognized following the cost principlescontained in the Uniform Guidance, wherein certain types of expenditures are not allowable or arelimited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. FEDERAL PERKINS LOAN PROGRAM (84.038) - Balances outstanding at the end of the audit period were 13682.
Title: Basis of Presentation Accounting Policies: The accompanying Schedule includes the federal grant transactions of the University recorded onthe accrual basis of accounting. Such expenditures are recognized following the cost principlescontained in the Uniform Guidance, wherein certain types of expenditures are not allowable or arelimited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) for the year ended June 30, 2022. The Schedule presents only a selected portion of the activities of Chowan University (the University). It is not intended to and does not present either the financial position, changes in activities, or cash flows of the University.
Title: Subrecipients Accounting Policies: The accompanying Schedule includes the federal grant transactions of the University recorded onthe accrual basis of accounting. Such expenditures are recognized following the cost principlescontained in the Uniform Guidance, wherein certain types of expenditures are not allowable or arelimited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. There were no program funds passed through the University to subrecipients during the year ended May 31, 2022.

Finding Details

Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268) Criteria or Specific Requirement: N. Special Test and Provisions ? Disbursements To or On Behalf of Students ? Loan Disbursement Notification - Federal regulations (34 CFR section 668.165 (a)(6)(i)) require that the institution notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student?s right, or parent?s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to the U.S. Department of Education; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. Institutions that implement an affirmative confirmation process (as described in 34 CFR section 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student?s account at the institution with Direct Loan or TEACH Grants. The Federal Student Aid Handbook further clarifies that in general, there are two types of notifications a school must provide: (1) a general notification to parent Direct PLUS borrowers and all students receiving Federal Student Aid (?FSA?) funds, and (2) a notice when FSA loan funds or TEACH Grant funds are credited to a student?s account. Condition: Certain borrowers did not receive a loan disbursement notification timely. Cause: Administrative oversight with respect to loan disbursement notifications. Effect or Potential Effect: Students and/or parents were not notified of loan disbursements and/or their right to cancel/decline loan awards in a timely manner. Questioned Costs: None. Context: For 2 of 25 students selected for testing, the University did not send the disbursement notification within the required timeframe. Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University enhance its procedures over loan disbursement notifications to ensure that such notifications are sent to student and/or parent borrowers within the required timeframe. Views of Responsible Officials: The University Financial Aid Office has restructured the disbursement notification schedule as noted below: ? Disbursement notification letters are to be printed every 21 days. The federal requirement for notification is every 30 days. ? The Direct Loan Officer and Director of Financial Aid have access to create and print the letters. ? Electronic calendar notices for the disbursement notifications are sent to the Direct Loan Officer, Director of Financial Aid and the Asst. Vice President for Analytics & Audit. ? Task completion will be verified by the Asst. Vice President for Analytics & Audit on a monthly basis.
Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268) Criteria or Specific Requirement: N. Special Test and Provisions ? Disbursements To or On Behalf of Students ? Loan Disbursement Notification - Federal regulations (34 CFR section 668.165 (a)(6)(i)) require that the institution notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student?s right, or parent?s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to the U.S. Department of Education; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. Institutions that implement an affirmative confirmation process (as described in 34 CFR section 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student?s account at the institution with Direct Loan or TEACH Grants. The Federal Student Aid Handbook further clarifies that in general, there are two types of notifications a school must provide: (1) a general notification to parent Direct PLUS borrowers and all students receiving Federal Student Aid (?FSA?) funds, and (2) a notice when FSA loan funds or TEACH Grant funds are credited to a student?s account. Condition: Certain borrowers did not receive a loan disbursement notification timely. Cause: Administrative oversight with respect to loan disbursement notifications. Effect or Potential Effect: Students and/or parents were not notified of loan disbursements and/or their right to cancel/decline loan awards in a timely manner. Questioned Costs: None. Context: For 2 of 25 students selected for testing, the University did not send the disbursement notification within the required timeframe. Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University enhance its procedures over loan disbursement notifications to ensure that such notifications are sent to student and/or parent borrowers within the required timeframe. Views of Responsible Officials: The University Financial Aid Office has restructured the disbursement notification schedule as noted below: ? Disbursement notification letters are to be printed every 21 days. The federal requirement for notification is every 30 days. ? The Direct Loan Officer and Director of Financial Aid have access to create and print the letters. ? Electronic calendar notices for the disbursement notifications are sent to the Direct Loan Officer, Director of Financial Aid and the Asst. Vice President for Analytics & Audit. ? Task completion will be verified by the Asst. Vice President for Analytics & Audit on a monthly basis.