Audit 350651

Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. 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 testing, KPMG identified that for one (1) of thirty (30) students selected for testwork, one (1) of the ten (10) required verification elements, specifically the parents’ education credits, was not accurately reflected within the student’s SAR and was not submitted for correction by the institution. In addition, as a result of the exception described above, the student's estimated family contribution (EFC) was miscalculated, resulting in a lower Pell Grant being awarded than the student was otherwise entitled to receive. Cause The condition resulted from the College’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the College’s control of reviewing all specified data elements for accuracy was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in student’s being awarded more or less aid than they would otherwise qualify for. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to verification to ensure that they are complying with federal requirements. Views of Responsible Officials Endicott College acknowledges that although we have tried to always complete the Verification process correctly, that our prior process still resulted in our making an error in this file. Therefore moving forward, we have instituted a second review process by a manager before any Verifications can be marked as completed. Going forward all Verifications completed will require the sign off of a manager confirming second review of the file. We have also developed a Verification checklist that must be completed by any staff completing a verification to ensure that all items required for verification are reviewed and updated as required.

Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. 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 testing, KPMG identified that for one (1) of thirty (30) students selected for testwork, one (1) of the ten (10) required verification elements, specifically the parents’ education credits, was not accurately reflected within the student’s SAR and was not submitted for correction by the institution. In addition, as a result of the exception described above, the student's estimated family contribution (EFC) was miscalculated, resulting in a lower Pell Grant being awarded than the student was otherwise entitled to receive. Cause The condition resulted from the College’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the College’s control of reviewing all specified data elements for accuracy was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in student’s being awarded more or less aid than they would otherwise qualify for. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to verification to ensure that they are complying with federal requirements. Views of Responsible Officials Endicott College acknowledges that although we have tried to always complete the Verification process correctly, that our prior process still resulted in our making an error in this file. Therefore moving forward, we have instituted a second review process by a manager before any Verifications can be marked as completed. Going forward all Verifications completed will require the sign off of a manager confirming second review of the file. We have also developed a Verification checklist that must be completed by any staff completing a verification to ensure that all items required for verification are reviewed and updated as required.

Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. 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 testing, KPMG identified that for one (1) of thirty (30) students selected for testwork, one (1) of the ten (10) required verification elements, specifically the parents’ education credits, was not accurately reflected within the student’s SAR and was not submitted for correction by the institution. In addition, as a result of the exception described above, the student's estimated family contribution (EFC) was miscalculated, resulting in a lower Pell Grant being awarded than the student was otherwise entitled to receive. Cause The condition resulted from the College’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the College’s control of reviewing all specified data elements for accuracy was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in student’s being awarded more or less aid than they would otherwise qualify for. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to verification to ensure that they are complying with federal requirements. Views of Responsible Officials Endicott College acknowledges that although we have tried to always complete the Verification process correctly, that our prior process still resulted in our making an error in this file. Therefore moving forward, we have instituted a second review process by a manager before any Verifications can be marked as completed. Going forward all Verifications completed will require the sign off of a manager confirming second review of the file. We have also developed a Verification checklist that must be completed by any staff completing a verification to ensure that all items required for verification are reviewed and updated as required.

Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. 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 testing, KPMG identified that for one (1) of thirty (30) students selected for testwork, one (1) of the ten (10) required verification elements, specifically the parents’ education credits, was not accurately reflected within the student’s SAR and was not submitted for correction by the institution. In addition, as a result of the exception described above, the student's estimated family contribution (EFC) was miscalculated, resulting in a lower Pell Grant being awarded than the student was otherwise entitled to receive. Cause The condition resulted from the College’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the College’s control of reviewing all specified data elements for accuracy was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in student’s being awarded more or less aid than they would otherwise qualify for. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to verification to ensure that they are complying with federal requirements. Views of Responsible Officials Endicott College acknowledges that although we have tried to always complete the Verification process correctly, that our prior process still resulted in our making an error in this file. Therefore moving forward, we have instituted a second review process by a manager before any Verifications can be marked as completed. Going forward all Verifications completed will require the sign off of a manager confirming second review of the file. We have also developed a Verification checklist that must be completed by any staff completing a verification to ensure that all items required for verification are reviewed and updated as required.