Criteria: The College is required to submit ED Form 646-1, Fiscal Operations Report and Application to Participate (FISAP) (OMB No. 1845-0030) – This electronic report is submitted annually to receive funds for the campus-based programs. The institution uses the Fiscal Operations Report portion to report its expenditures in the previous award year and the Application to Participate portion to apply for the following year. By October 1, 2022, the institution should submit its FISAP that includes the Fiscal Operations Report for the award year 2021–2022 and the Application to Participate for the 2022–2023 award year (FWS, FSEOG 34 CFR 673.3; Fiscal Operations Report and Application to Participate Instructions).
Condition: Part III, Fiscal Operations Report, lines 1.1 through 5.1 related to the Perkins loan program did not tie to the underlying support provided by the College.
Cause: The College received multiple versions of reports from their third-party Perkins loan servicer related to the information used to prepare the Perkins loan section of the annual FISAP report. The College's internal controls were not effective in identifying errors in the reporting on the FISAP on a timely basis.
Effect: The College may have reported incorrect Perkins loan information on the FISAP report submitted to the Department of Education.
Questioned Costs: Not applicable
Recommendation: It is recommended that the College review procedures in place to ensure accurate reporting of Perkins loan information to comply with Title IV regulations.
Management's Response: The College is changing Perkins servicers to help ensure accurate reporting in the future. The third-party service provider was unable to send accurate reports to the college during 2023. The College has terminated its relationship with the previous service provider effective 1/31/2024 and is conducting a final reconciliation with the new agency. Once the final reconciliation has been completed, the college will submit official corrections to the FISAP with the Department of Education. This should enable the college to provide accurate and timely reporting going forward.
Criteria: Title IV regulations (34 CFR 685.309(b)) require that upon receipt of an enrollment report from the Secretary, institutions must update all information included in the report and return the report to the Secretary: (i) in the manner and format prescribed by the Secretary; and (ii) within the timeframe prescribed by the Secretary. Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the institution discovers that: (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a halftime basis for the period for which the loan was intended; or (ii) a student who is enrolled at the institution and who received a loan under Title IV of the Act has changed his or her permanent address.
Condition: Exceptions were noted for 11 out of the 25 students tested. The exceptions are as follows:
• For six students, the College failed to report enrollment updates to National Student Loan Data System (NSLDS) at the campus or program level within 30 days or included in a response to a roster file within 60 days.
• For four students, incorrect effective dates were reported at the program level.
• For one student, the College was unable to provide documentation for an address change.
The sample was not a statistically valid sample but was determined using Chapter 21 - Audit Sampling Considerations of Uniform Guidance Compliance Audits of the Government Auditing Standards and the Single Audits Audit and Accounting Guide.
Cause: For the six students with enrollment updates not timely reported, it was due to the College's system not processing a status change when the status change occurred during the semester. For the four students with incorrect effective dates, it was due to the College reporting the withdrawal date as the last day of the semester instead of the effective date. The lack of documentation for the one student's address change was due to human error.
Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the enrollment information reported by institutions. If an institution does not review, update, and verify student enrollment statuses, effective dates of the enrollment status, anticipated completion dates, and address changes, then the Title IV student loan records will be inaccurate, impacting student loan repayments.
Questioned Costs: Not Applicable
Recommendation: We recommend the College adjust their procedures to correctly report all status changes in enrollment during the semester, work with the National Student Clearinghouse to understand the errors in program level reporting to NSLDS, and ensure that documentation regarding address changes are maintained.
Management's Response: Management acknowledges the finding. The registrar has been processing NSC files at least every 28 days during MCAD’s three academic terms. They will implement additional checks on enrollment to locate status changes within term. Also, they will begin reporting status changes that occur between terms, rather than at the beginning of the following term.
Criteria: Title IV regulations note that Direct Loan reconciliation is a mandatory monthly process, as required under 34 CFR 685.300(b)(5). The U.S. Department of Education released an electronic announcement December 18, 2020 reminding institutions of this requirement. Each month, Common Origination and Disbursement (COD) provides institutions with a School Account Statement (SAS) data file which consists of a Cash Summary, Cash Detail, and (optional at the request of the institution) Loan Detail records. The institution is required to reconcile these files to the institution's financial records. At a minimum, this reconciliation must be completed at least monthly to ensure that data is correct in all systems and that cash management and disbursement reporting timelines are being met. Since up to three Direct Loan program years may be open at any given time, institutions may receive three SAS data files each month.
The sample was not a statistically valid sample but was determined using Chapter 21 - Audit Sampling Considerations of Uniform Guidance Compliance Audits of the Government Auditing Standards and the Single Audits Audit and Accounting Guide.
Condition: Management notes that reconciliations are performed timely, but there is no review of the reconciliations by someone other than the preparer. Of the three reconciliations that were tested, all appeared to be reconciled before the month was over.
Cause: Management did not have the reconciliations formally reviewed.
Effect: Without proper reviews performed, there is a greater risk that the information in the College's system or data reported to COD may be incorrect and would not be corrected timely.
Questioned Costs: N/A
Recommendation: It is recommended that the College review staffing and policies and procedures to ensure that the monthly Direct Loan reconciliation is completed and reviewed in a timely manner to facilitate compliance with Title IV regulations.
Management's Response: Management acknowledges this finding. Due to insufficient staffing, review of reconciliations was inconsistent. New permanent staff have been hired in all critical business office roles so that reconciliations are now regularly reviewed by a second staff member
Criteria: The College is required to submit ED Form 646-1, Fiscal Operations Report and Application to Participate (FISAP) (OMB No. 1845-0030) – This electronic report is submitted annually to receive funds for the campus-based programs. The institution uses the Fiscal Operations Report portion to report its expenditures in the previous award year and the Application to Participate portion to apply for the following year. By October 1, 2022, the institution should submit its FISAP that includes the Fiscal Operations Report for the award year 2021–2022 and the Application to Participate for the 2022–2023 award year (FWS, FSEOG 34 CFR 673.3; Fiscal Operations Report and Application to Participate Instructions).
Condition: Part III, Fiscal Operations Report, lines 1.1 through 5.1 related to the Perkins loan program did not tie to the underlying support provided by the College.
Cause: The College received multiple versions of reports from their third-party Perkins loan servicer related to the information used to prepare the Perkins loan section of the annual FISAP report. The College's internal controls were not effective in identifying errors in the reporting on the FISAP on a timely basis.
Effect: The College may have reported incorrect Perkins loan information on the FISAP report submitted to the Department of Education.
Questioned Costs: Not applicable
Recommendation: It is recommended that the College review procedures in place to ensure accurate reporting of Perkins loan information to comply with Title IV regulations.
Management's Response: The College is changing Perkins servicers to help ensure accurate reporting in the future. The third-party service provider was unable to send accurate reports to the college during 2023. The College has terminated its relationship with the previous service provider effective 1/31/2024 and is conducting a final reconciliation with the new agency. Once the final reconciliation has been completed, the college will submit official corrections to the FISAP with the Department of Education. This should enable the college to provide accurate and timely reporting going forward.
Criteria: Title IV regulations (34 CFR 685.309(b)) require that upon receipt of an enrollment report from the Secretary, institutions must update all information included in the report and return the report to the Secretary: (i) in the manner and format prescribed by the Secretary; and (ii) within the timeframe prescribed by the Secretary. Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the institution discovers that: (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a halftime basis for the period for which the loan was intended; or (ii) a student who is enrolled at the institution and who received a loan under Title IV of the Act has changed his or her permanent address.
Condition: Exceptions were noted for 11 out of the 25 students tested. The exceptions are as follows:
• For six students, the College failed to report enrollment updates to National Student Loan Data System (NSLDS) at the campus or program level within 30 days or included in a response to a roster file within 60 days.
• For four students, incorrect effective dates were reported at the program level.
• For one student, the College was unable to provide documentation for an address change.
The sample was not a statistically valid sample but was determined using Chapter 21 - Audit Sampling Considerations of Uniform Guidance Compliance Audits of the Government Auditing Standards and the Single Audits Audit and Accounting Guide.
Cause: For the six students with enrollment updates not timely reported, it was due to the College's system not processing a status change when the status change occurred during the semester. For the four students with incorrect effective dates, it was due to the College reporting the withdrawal date as the last day of the semester instead of the effective date. The lack of documentation for the one student's address change was due to human error.
Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the enrollment information reported by institutions. If an institution does not review, update, and verify student enrollment statuses, effective dates of the enrollment status, anticipated completion dates, and address changes, then the Title IV student loan records will be inaccurate, impacting student loan repayments.
Questioned Costs: Not Applicable
Recommendation: We recommend the College adjust their procedures to correctly report all status changes in enrollment during the semester, work with the National Student Clearinghouse to understand the errors in program level reporting to NSLDS, and ensure that documentation regarding address changes are maintained.
Management's Response: Management acknowledges the finding. The registrar has been processing NSC files at least every 28 days during MCAD’s three academic terms. They will implement additional checks on enrollment to locate status changes within term. Also, they will begin reporting status changes that occur between terms, rather than at the beginning of the following term.
Criteria: Title IV regulations note that Direct Loan reconciliation is a mandatory monthly process, as required under 34 CFR 685.300(b)(5). The U.S. Department of Education released an electronic announcement December 18, 2020 reminding institutions of this requirement. Each month, Common Origination and Disbursement (COD) provides institutions with a School Account Statement (SAS) data file which consists of a Cash Summary, Cash Detail, and (optional at the request of the institution) Loan Detail records. The institution is required to reconcile these files to the institution's financial records. At a minimum, this reconciliation must be completed at least monthly to ensure that data is correct in all systems and that cash management and disbursement reporting timelines are being met. Since up to three Direct Loan program years may be open at any given time, institutions may receive three SAS data files each month.
The sample was not a statistically valid sample but was determined using Chapter 21 - Audit Sampling Considerations of Uniform Guidance Compliance Audits of the Government Auditing Standards and the Single Audits Audit and Accounting Guide.
Condition: Management notes that reconciliations are performed timely, but there is no review of the reconciliations by someone other than the preparer. Of the three reconciliations that were tested, all appeared to be reconciled before the month was over.
Cause: Management did not have the reconciliations formally reviewed.
Effect: Without proper reviews performed, there is a greater risk that the information in the College's system or data reported to COD may be incorrect and would not be corrected timely.
Questioned Costs: N/A
Recommendation: It is recommended that the College review staffing and policies and procedures to ensure that the monthly Direct Loan reconciliation is completed and reviewed in a timely manner to facilitate compliance with Title IV regulations.
Management's Response: Management acknowledges this finding. Due to insufficient staffing, review of reconciliations was inconsistent. New permanent staff have been hired in all critical business office roles so that reconciliations are now regularly reviewed by a second staff member