FAC Explorer

Audit 3573

FY End
2023-06-30
Total Expended
$152.48M
Findings
4
Programs
7
Organization: Philadelphia College of Osteopathic Medicine Foundation (PA)
Year: 2023 Accepted: 2023-11-17
Auditor: Bdo USA PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
2062 2023-001 - - C
2063 2023-002 - - N
578504 2023-001 - - C
578505 2023-002 - - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $150.84M Yes 2
84.033 Federal Work Study Program $1.29M Yes 0
93.342 Health Professions Student Loans - Loans for Disadvantaged Students $240,000 Yes 0
93.855 Alergy and Infectious Diseases Research $17,853 - 0
47.075 Social, Behavorial, and Economic Sciences $16,177 - 0
47.074 Biological Sciences $14,814 - 0
93.837 Cardiovascular Diseases Research $2,640 - 0

Contacts

Name Title Type
DVSBNKN6LGL6 Peter Doulis Auditee
2158716900 Michael Botzis Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized 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: The Organization has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of Philadelphia College of Osteopathic Medicine Foundation and Related Entities (the “Organization”) under programs of the federal government for the year ended June 30, 2023. The information in 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”). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the consolidated financial position, changes in net assets or cash flows of the Organization.
Title: Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized 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: The Organization has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Organization did not pass any federal awards through to other organizations during the year ended June 30, 2023.
Title: Federal Student Loan Programs Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized 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: The Organization has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Organization is responsible only for the performance of certain administrative duties with respect to its Federal Direct Student Loan programs and, accordingly, these loans are not included in the Organization’s consolidated financial statements. It is not practicable to determine the balance of loans outstanding to students and former students of the Organization under these programs as of June 30, 2023. Loan advances during the fiscal year ended June 30, 2023 have been reflected in the Schedule. The Organization also participates in and partially administers the following student loan programs: The Organization accounts for such loan programs in separate revolving loan funds. As such, the balances and transactions of these loan programs are recorded in the Organization’s consolidated financial statements. In accordance with the Uniform Guidance, amounts on the Schedule include loans disbursed in the current year. The loan programs are partially administered by a third-party service provider. During the year ended June 30, 2023, the Organization began close out and liquidation procedures related to its Federal Perkins Loan Program (“FPL Program”). As of June 30, 2023, approximately $705,000 of student loans outstanding had been assigned and accepted by the U.S Department of Education (“ED”). No new loans were advanced under the FPL Program during the year ended June 30, 2023. Subsequent to June 30, 2023, all FPL Program loans outstanding were assigned and accepted by the ED.

Finding Details

Finding 2023-001
Program Information: Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance is allowed and considered tolerable if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: Certain instances were identified during the year in which funds drawn were held in excess of the allowable time frame. Cause: Administrative oversight with respect to Cash Management compliance requirements. Effect or Potential Effect: The Organization is not in compliance with Cash Management compliance requirements. Questioned Costs: None. Context: During our testing, we identified 3 instances of cash held in excess of allowable time frames for the Federal Direct Loan Program as noted below: Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its procedures to ensure that excess cash is returned timely. Views of Responsible Officials and Planned Corrective Actions: Through 9/13/22, PCOM used a Banner generated report to draw down direct loan funds. PCOM found there was an error with the Banner report causing excess funds to be drawn on 6/30/22, 8/2/22 and 8/31/22. With the assistance of the Student Services department a new process to draw direct loans began in November 2022. The process compares disbursements recorded by the Department of Education's Common Origination and Disbursement (COD) website to that of the disbursements paid in PCOM’s ERP information system. The finance department ensures the amount to be drawn from COD is either less than or matches the available funds on the COD site. Since the implementation of the new process there have been no drawdowns that resulted in an excess cash situation.
Finding 2023-002
Program Information: Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Condition: The Organization did not properly calculate the amounts to be returned to the ED. Cause: Administrative oversight with respect to return of Title IV fund calculations and post-withdrawal disbursements. Effect or Potential Effect: The Organization was not in compliance with the return of Title IV funds requirements. Questioned Costs: None. Context: For 2 of 9 students selected for testing, the Organization did not properly calculate the amount of Title IV aid to be returned to the ED. The amount returned to the ED was greater than the amount owed based upon the students’ withdrawal date. Identification of Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the Organization enhance its procedures over the return of Title IV fund calculations to ensure that returns of funds are calculated accurately. Views of Responsible Officials and Planned Corrective Actions: In fiscal year 2023 (FY23), the return of federal funds calculation and process was automated in the Banner student information system; therefore, reducing the possibility of an incorrect calculation. Furthermore, a financial aid staff member reviewed the return of federal funds calculations twice during the fiscal year to ensure accuracy. However, it was determined that two of the students selected in the FY23 audit sample had incorrect academic dates used in their calculation. As a graduate/professional school, PCOM has several academic calendars rather than one institutional calendar. The need for multiple academic calendars is due to the variations in the start and end times of our students completing offsite clinical rotations. For fiscal year 2024 (FY24), PCOM will be implementing the following additional controls to ensure the correct academic calendar is used in the return of title 4 calculations: 1. Academic calendar dates will be added to the report used to review students who have withdrawn from their coursework. 2. The report will be run after the end of every term (4 times a year) and it will go through an initial review by one staff member and then a final review by another staff member.
Finding 2023-001
Program Information: Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance is allowed and considered tolerable if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: Certain instances were identified during the year in which funds drawn were held in excess of the allowable time frame. Cause: Administrative oversight with respect to Cash Management compliance requirements. Effect or Potential Effect: The Organization is not in compliance with Cash Management compliance requirements. Questioned Costs: None. Context: During our testing, we identified 3 instances of cash held in excess of allowable time frames for the Federal Direct Loan Program as noted below: Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its procedures to ensure that excess cash is returned timely. Views of Responsible Officials and Planned Corrective Actions: Through 9/13/22, PCOM used a Banner generated report to draw down direct loan funds. PCOM found there was an error with the Banner report causing excess funds to be drawn on 6/30/22, 8/2/22 and 8/31/22. With the assistance of the Student Services department a new process to draw direct loans began in November 2022. The process compares disbursements recorded by the Department of Education's Common Origination and Disbursement (COD) website to that of the disbursements paid in PCOM’s ERP information system. The finance department ensures the amount to be drawn from COD is either less than or matches the available funds on the COD site. Since the implementation of the new process there have been no drawdowns that resulted in an excess cash situation.
Finding 2023-002
Program Information: Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Condition: The Organization did not properly calculate the amounts to be returned to the ED. Cause: Administrative oversight with respect to return of Title IV fund calculations and post-withdrawal disbursements. Effect or Potential Effect: The Organization was not in compliance with the return of Title IV funds requirements. Questioned Costs: None. Context: For 2 of 9 students selected for testing, the Organization did not properly calculate the amount of Title IV aid to be returned to the ED. The amount returned to the ED was greater than the amount owed based upon the students’ withdrawal date. Identification of Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the Organization enhance its procedures over the return of Title IV fund calculations to ensure that returns of funds are calculated accurately. Views of Responsible Officials and Planned Corrective Actions: In fiscal year 2023 (FY23), the return of federal funds calculation and process was automated in the Banner student information system; therefore, reducing the possibility of an incorrect calculation. Furthermore, a financial aid staff member reviewed the return of federal funds calculations twice during the fiscal year to ensure accuracy. However, it was determined that two of the students selected in the FY23 audit sample had incorrect academic dates used in their calculation. As a graduate/professional school, PCOM has several academic calendars rather than one institutional calendar. The need for multiple academic calendars is due to the variations in the start and end times of our students completing offsite clinical rotations. For fiscal year 2024 (FY24), PCOM will be implementing the following additional controls to ensure the correct academic calendar is used in the return of title 4 calculations: 1. Academic calendar dates will be added to the report used to review students who have withdrawn from their coursework. 2. The report will be run after the end of every term (4 times a year) and it will go through an initial review by one staff member and then a final review by another staff member.