Audit 292627

Criteria Prior to making a disbursement, the school must notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made (often referred to as an award letter or college financing plan) (34 CFR 668.165(a)(1)). Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over disbursements, we identified three (3) instances within our sample of forty (40) disbursements where the federal aid disbursement was credited to the student’s account prior to the College providing the award notification to the student. Each of the exceptions involved off-cycle Direct Loan Program disbursements with notification occurring within a period of two days after the federal aid disbursement was credited to the student’s account. Cause The condition resulted from a delay in the processing of the daily award notification process for certain off-cycle Direct Loan disbursements. Possible Asserted Effect Delayed notification could result in errors in determining a student’s ability to cancel all or a portion of the Direct Loan funds awarded. Additionally, failure to provide the required information in a timely manner in accordance with federal requirements and implement sufficient internal controls to ensure the program is operating effectively resulted in the College’s program being noncompliant with Federal statues, regulations and the terms and conditions of the awards. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the College review and enhance its process related to award notifications to ensure that the notifications are received by students prior to the College disbursing the federal aid to the student’s account. Views of Responsible Officials The College acknowledges that the noted three off-cycle disbursements did not meet the notification requirement. The College has evaluated its current procedures for releasing its financial aid notifications and identified system improvements that will result in notifications being sent prior to the disbursements being processed to ensure all requirements for this program are met. These process and system updates will be implemented before the end of fiscal year 2024.

Criteria Prior to making a disbursement, the school must notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made (often referred to as an award letter or college financing plan) (34 CFR 668.165(a)(1)). Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over disbursements, we identified three (3) instances within our sample of forty (40) disbursements where the federal aid disbursement was credited to the student’s account prior to the College providing the award notification to the student. Each of the exceptions involved off-cycle Direct Loan Program disbursements with notification occurring within a period of two days after the federal aid disbursement was credited to the student’s account. Cause The condition resulted from a delay in the processing of the daily award notification process for certain off-cycle Direct Loan disbursements. Possible Asserted Effect Delayed notification could result in errors in determining a student’s ability to cancel all or a portion of the Direct Loan funds awarded. Additionally, failure to provide the required information in a timely manner in accordance with federal requirements and implement sufficient internal controls to ensure the program is operating effectively resulted in the College’s program being noncompliant with Federal statues, regulations and the terms and conditions of the awards. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the College review and enhance its process related to award notifications to ensure that the notifications are received by students prior to the College disbursing the federal aid to the student’s account. Views of Responsible Officials The College acknowledges that the noted three off-cycle disbursements did not meet the notification requirement. The College has evaluated its current procedures for releasing its financial aid notifications and identified system improvements that will result in notifications being sent prior to the disbursements being processed to ensure all requirements for this program are met. These process and system updates will be implemented before the end of fiscal year 2024.