Audit 343821

FY End
2024-05-31
Total Expended
$8.30M
Findings
2
Programs
3
Organization: The Colleges of Law (CA)
Year: 2024 Accepted: 2025-02-26
Auditor: Rsm US LLP

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
524468 2024-001 Significant Deficiency - C
1100910 2024-001 Significant Deficiency - C

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $8.24M Yes 1
84.033 Federal Work-Study Program $36,840 Yes 0
84.063 Federal Pell Grant Program $22,292 Yes 0

Contacts

Name Title Type
HT1MVLWFKSX3 Theresa Cowan Auditee
3177556905 Craig Wories Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: COL has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of The Colleges of Law ("COL") under programs of the federal government for the year ended May 31, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Fedreal Awards (Uniform Guidnace). Because the Schedule presents only a portion of the operations of COL, it is not intended to and does not present the financial position, changes in net assets, or cash flows of COL. No funds were identified as having been provided to subrecipients by COL, and accordingly, no funds identified in the schedule of expenditures of federal awards are attributable to subrecipient entities. There were no federal awards expended for non-cash assistance or insurance at year-end.
Title: Note 2. Summary of Significant Accounting Policies. Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: COL has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note 3. Indirect Cost Rate Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: COL has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. COL has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note 4. Federal Student Loan Program Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: COL has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. During the fiscal year ended May 31, 2024, COL issued new loans to students under the Federal Direct Student Loan Program (FDLP). The loan program includes subsidized and unsubsidized Stafford Loans and PLUS loans for graduate and professional students. The value of loans for the FDLP is based on disbursed amounts. The loan amounts issued during the year are disclosed in the Schedule. COL is responsible only for the performance of certain administrative duties with respect to the federally guaranteed student loan programs and, accordingly, balances and transactions relating to these loan programs are not included in COL's basic financial statements. Therefore, it is not practicable to determine the balacne of loans outstanding to students and formet students of COL at May 31, 2024.

Finding Details

Finding 2024-001: Excess Cash – Student Financial Aid Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $14,342,246 Questioned Costs: None Criteria: Uniform Grant Guidance (34 CFR 668.166) states the Secretary considers excess cash to be any amount of title IV, HEA program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution (1) received those funds from the Secretary; or (2) deposited or transferred to its depository account previously disbursed title IV, HEA program funds, such as those resulting from awards adjustments, recoveries, or cancellations. An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure excess cash is properly handled. Condition: The Colleges of Law (COL) had one instance of excess cash for the Federal Direct Student Loan program. During our cash management testing, we identified COL had excess cash for the Direct Loan program ranging from $172 to $10,314 for the period from March 25, 2024 to April 5, 2024. For that period, the excess cash did not exceed one percent of total prior year drawdowns, however, amounts were not returned within the seven-day period. Cause: University officials stated the excess cash issues were due to oversight regarding refunds issued to students. Effect: Excess cash is noncompliance with Federal regulations and could result in heightened monitoring by the U.S. Department of Education. Questioned Costs: None   Context: For the period of March 25, 2024 to April 5, 2024, COL had excess cash in the amount ranging from $172 to $10,314. COL had excess cash for a period of 11 calendar days. Repeat Finding: No. Recommendation: We recommend COL strengthen internal controls around the determination of amounts to be drawn and refunded to the Secretary during the fiscal year. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.
Finding 2024-001: Excess Cash – Student Financial Aid Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $14,342,246 Questioned Costs: None Criteria: Uniform Grant Guidance (34 CFR 668.166) states the Secretary considers excess cash to be any amount of title IV, HEA program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution (1) received those funds from the Secretary; or (2) deposited or transferred to its depository account previously disbursed title IV, HEA program funds, such as those resulting from awards adjustments, recoveries, or cancellations. An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure excess cash is properly handled. Condition: The Colleges of Law (COL) had one instance of excess cash for the Federal Direct Student Loan program. During our cash management testing, we identified COL had excess cash for the Direct Loan program ranging from $172 to $10,314 for the period from March 25, 2024 to April 5, 2024. For that period, the excess cash did not exceed one percent of total prior year drawdowns, however, amounts were not returned within the seven-day period. Cause: University officials stated the excess cash issues were due to oversight regarding refunds issued to students. Effect: Excess cash is noncompliance with Federal regulations and could result in heightened monitoring by the U.S. Department of Education. Questioned Costs: None   Context: For the period of March 25, 2024 to April 5, 2024, COL had excess cash in the amount ranging from $172 to $10,314. COL had excess cash for a period of 11 calendar days. Repeat Finding: No. Recommendation: We recommend COL strengthen internal controls around the determination of amounts to be drawn and refunded to the Secretary during the fiscal year. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.