Finding 2024-003 N. Special Tests and Provisions – Verification Identification of the Federal Program: Grantor: Department of Education Program Name: Student Financial Assistance Cluster Assistance Listing No.: Various Criteria or Specific Requirement: Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) 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 statutes, 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).” Title 34, Subtitle B, Chapter VI, Part 668, Subpart E 668.51 through 668.61 describes procedures for verifying applicant information for those applicants selected for verification by the Department of Education (DOE), including requiring each applicant whose Free Application for Federal Student Aid (FAFSA) is selected for verification by the DOE to verify the information specified by the DOE. Condition: Mount Sinai Phillips School of Nursing (PSON), did not retain all documentation to evidence the review as required for the verification process as outlined in the Federal Student Aid Handbook. As a result, information required to be verified was not retained or available as evidence that the control was operating effectively. Cause: PSON did not have sufficient internal controls to ensure that the required evidence to be obtained and reviewed was retained. Effect or Potential Effect: The lack of effective review controls over verification has the potential to result in applicant information reported on the applicant’s FAFSA to be incorrect. Questioned Costs: None identified. Context: The testing performed for this compliance requirement is only required for subsidized loans. A sample of five applicants with subsidized loans during the fiscal year who were selected for verification by the DOE were selected for testing. There was one instance in which insufficient documentation was retained to evidence all verification requirements were met. This compliance requirement was not applicable to Icahn School of Medicine at Mount Sinai (ISMMS) as none of the loans are subsidized. Recommendation: Management should enhance its existing controls to ensure all required documentation to verify a selected student’s information is retained for those applicants selected for verification by the DOE. Views of Responsible Officials: Management agrees with the finding described above. PSON’s Office of Student Financial will implement a process that ensures all required documentation is retained. Employees of the Student Financial Aid Office will be trained and PSON will be in compliance with the requirements in the Federal Student Aid Handbook.
Finding 2024-004 N. Special Tests and Provisions – Enrollment Reporting Identification of the Federal Program: Grantor: Department of Education Program Name: Student Financial Assistance Cluster Assistance Listing No.: Various Criteria or Specific Requirement: Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) 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 statutes, 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).” Title 34, Subtitle B, Chapter VI, Part 685, Subpart C 685.309 describes that an institution is required to update the status of a student on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the institution becomes aware of the change in enrollment status, and the institution is responsible for accurately reporting all data elements. Condition: Management’s review process did not ensure significant data elements were accurately reported to the NSLDS website for certain students whose enrollment status changed during the year and/or did not report the status changes within the required timeframe. Cause: For PSON and ISMMS, the completeness of the enrollment reporting roster was not properly reviewed resulting in recently graduated students being excluded from the roster, which resulted in the NSLDS system defaulting the status to withdrawn. Further, an enrollment reporting roster for ISMMS was submitted late. Effect or Potential Effect: Lack of internal controls over timely and accurate enrollment reporting resulted in inaccurate enrollment status. Enrollment reporting in a timely and accurate manner is important for effective management of the programs. Questioned Costs: None identified Context: For PSON, of a sample of 11 students receiving Pell and Direct Student Loans during the fiscal year, 8 were reported to the NSLDS with an incorrect status change. For ISMMS, of a sample of 14 students receiving Pell and Direct Student Loans during the fiscal year, 3 were reported to the NSLDS with an incorrect status change and one status change was submitted beyond the 60 day requirement. For each of the instances of incorrect status changes reported to NSLDS, the system defaulted the status of the student as withdrawn as opposed to graduated. It was noted that all of the students completed 100% of the course work and, therefore, no Title IV funds were required to be returned for these students. Recommendation: Management should enhance its existing controls to ensure all status changes reported to the NSLDS accurately reflect the correct status of the student, and that any changes are submitted within the 60 day requirement. Views of Responsible Officials: Management agrees with the finding described above. PSON and ISSMS’ Offices of Student Financial will ensure that all NSLDS submissions are made timely and with the correct status of each student.
Finding 2024-005 N. Special Tests and Provisions – Disbursement to or on Behalf of Students Identification of the Federal Program: Grantor: Department of Education Program Name: Student Financial Assistance Cluster Assistance Listing No.: Various Criteria or Specific Requirement: Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) 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 statutes, 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).” Title 34, Subtitle B, Chapter VI, Part 668, Subpart K 668.164(h) describes that when a student who received Title IV funds has total loans exceeding the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. Condition: Management has a review process in place to process and issue refunds to students for credit balances. However, this process did not ensure refunds were issued within the required timeframe. As a result, there were instances of refunds issued beyond the 14 day requirement. Cause: The internal controls in place for the issuance of credit refunds to students did not ensure refunds were issued to students within the required timeframe of 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. Effect or Potential Effect: The lack of effective controls over the credit refund process has the potential to result in ISMMS and PSON not returning funds owed to the student within the required timeframe. Questioned Costs: None identified Context: For ISMMS, of a sample of 40 credit refunds issued during the fiscal year, there were 12 instances of refunds issued beyond the 14 day requirement. ISMMS issued 798 refunds during the year totaling $7,503,258. For PSON, of a sample of 40 credit refunds issued during the fiscal year, there were 9 instances of refunds issued beyond the 14 day requirement. PSON issued 395 refunds during the year totaling $2,139,327. Recommendation: ISMMS and PSON should enhance controls to ensure all credit balances are refunded to students within 14 days of the creation of the credit balance. Views of Responsible Officials: Management agrees with the finding that certain credit refunds were not issued timely. PSON and ISMMS’ Offices of Student Financial will implement a control that ensures communication related to refunds is enhanced when a student withdraws. The control will ensure that all credit refunds are issued timely.
Finding 2024-006 L. Reporting Identification of the Federal Program: Grantor: Department of Education Program Name: Student Financial Assistance Cluster Assistance Listing No.: Various Criteria or Specific Requirement: Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) 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 statutes, 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).” Title 34, Subtitle B, Chapter VI, Part 674, Subpart A 674.19(h) describes that each year an institution shall submit a Fiscal Operations Report and Application to Participate (FISAP) in addition to other information the DOE requires. The institution shall ensure that the information reported is accurate and shall submit it on the form and at the time specified by the DOE. Condition: Management has a review process in place to ensure the FISAP is completed and submitted within the required deadline. However, for PSON, this review process did not ensure the information within the FISAP was accurate. As a result, the FISAP for the report year ended June 30, 2024 was submitted with inaccurate statistics for one section. Cause: Due to a lack of precision of the review control, certain differences between the FISAP and the underlying schedules were not identified and corrected. Effect or Potential Effect: The lack of effective controls over the FISAP preparation and review and approval process has the potential to result in inaccuracies in the submission which could result in reductions of fund allocations. Questioned Costs: None identified Context: For the report year ended June 30, 2024, the FISAP for PSON was submitted by the organization with certain inaccurate student statistics. A corrected FISAP was subsequently submitted during the audit process. It was noted that, although certain categories of students were corrected in the resubmission, the total number of students and tuition received was accurate in the original submission. No such inaccuracies were noted in the FISAP for report year ended June 30, 2024 for ISMMS. Recommendation: Management should enhance its review controls to ensure the FISAP is correctly populated prior to submission. Views of Responsible Officials: Management agrees with the finding that FISAP was not correctly populated. Management has since corrected the data and submitted a revised FISAP. Management notes there was turnover in the PSON’s Office of Student Financial Aid during the year and an employee was not properly trained on the FISAP preparation. Training has since been implemented and new employees in the department will be trained accordingly.
Finding 2024-007 I. Procurement and Suspension and Debarment Identification of the Federal Program: Grantor: Department of Agriculture, Department of Defense, Department of Labor, National Aeronautics and Space Administration, Promotion of the Arts Grants to Organizations and Individuals, National Science Foundation, Department of Veteran Affairs, Environment Protection Agency, Department of Energy, Department of Health and Human Services, U.S. Agency for International Development Program Name: Research and Development Cluster Assistance Listing No.: Various Criteria or Specific Requirement: Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) 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 statutes, 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).” Title 2, Subtitle A, Chapter II, Part 200, Subpart D 200.320 – Procurement methods – outlines the acceptable methods of procurement. Purchases below the simple acquisition threshold, but above the micro-purchase threshold, require price and rate quotations to be obtained from an adequate number of qualified sources. Condition: The System did not follow its purchasing policy requirements for certain purchases during the period October 7, 2024 through December 31, 2024, which required competitive bids or documentation of sole source justification. Cause: Due to the change in the ERP system on October 7, 2024, the previous process that directed purchase orders made by certain designated individuals to the purchasing department for verification of appropriate procurement procedures for purchases exceeding the micro-purchase threshold was no longer in effect. This resulted in the System not completing applicable procurement requirements prior to entering into a transaction for these purchases. Effect or Potential Effect: The lack of effective controls in place to ensure the proper purchasing policies are followed has the potential to result in noncompliance with the requirements. Questioned Costs: Known questioned costs of $44,178. Based on the analysis provided by management of all purchases made by certain designated individuals above the micro-purchase threshold from October 7, 2024 to December 31, 2024, the likely questioned costs are $939,712. Context: Of a sample of 60 purchase orders within the Research and Development Cluster above the micro-purchase threshold during the fiscal year, there were 3 instances in which required procurement procedures were not appropriately completed. Recommendation: Management should enhance the process for reviewing purchases made using federal funds to ensure the appropriate procurement requirements are completed prior to entering into a transaction. Views of Responsible Officials: Management agrees with the finding described above. In October 2024, Mount Sinai transitioned to Oracle Cloud for its Enterprise Resource Planning (ERP) and general ledger system. During this transition, Deputy Buyer transactions of $10,000 and above were not routed to the Purchasing Team for review, allowing purchase orders to be completed without the required documentation, including Sole Source Justifications, Directed Source Justifications, or multiple quotes as required under Uniform Guidance. Corrective actions, including a system enhancement, have been implemented to remediate this issue. Mount Sinai’s enhanced process ensures Deputy Buyer transactions of $10,000 and above are routed appropriately to the Purchasing Team for validation and documentation review. In addition, a quarterly manual review process, supported by reports developed in partnership with Mount Sinai’s technology team, will be fully implemented as a compensating control in the fourth quarter of 2025.
Finding 2024-008 I. Procurement and Suspension and Debarment Identification of the Federal Program: Grantor: Department of Agriculture, Department of Defense, Department of Labor, National Aeronautics and Space Administration, Promotion of the Arts Grants to Organizations and Individuals, National Science Foundation, Department of Veteran Affairs, Environment Protection Agency, Department of Energy, Department of Health and Human Services, U.S. Agency for International Development Program Name: Research and Development Cluster Assistance Listing No.: Various Criteria or Specific Requirement: Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) 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 statutes, 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).” Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214 – Suspension and debarment – Non-Federal entities are subject to the non-procurement debarment and suspension regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: Management was unable to provide evidence of a control being consistently performed throughout the audit period to address the risk that the System may enter into a transaction with an entity that is suspended, debarred, or otherwise excluded. We noted the following matters during our testing of suspension and debarment: (a) The System did not submit all vendors to the third-party service provider for on-going monitoring for the months of January 2024 through September 2024. (b) The System did not obtain a detailed listing of all vendors screened with related results from the third-party service provider. The System receives a summarized results report with a total number of vendors screened for suspension and debarment by the third-party service provider. However, a reconciliation was not performed and retained between the vendors provided by the System and the service provider’s summarized results report to evidence that all vendors submitted were screened. (c) The System did not retain evidence of review of the results provided by the third-party service provider, including evidence that unverified vendors or those that were indicated as excluded were investigated and evaluated by the System. (d) The System did not retain evidence of review of new vendors being screened for suspension and debarment prior to entering into a transaction. Cause: The System did not have a process in place to review the results of screened vendors to verify that all vendors are screened. Effect or Potential Effect: The lack of effective controls over suspension and debarment has the potential to result in noncompliance with the requirement. By not performing a reconciliation between the listings submitted by the System and the results provided by the third-party service provider, there is a risk that vendors are not screened by the third-party service provider and such vendors used for federally funded activities may be suspended or debarred. Questioned Costs: Known questioned costs: $56,000. Context: Management was unable to provide evidence of a control being consistently performed throughout the audit period, as described in the Condition section above. Further, of a sample of 60 current year expenditure transactions within the Research and Development Cluster, there was 1 instance in which no evidence could be provided to validate that the vendor was neither suspended nor debarred prior to entering into the transaction. Recommendation: Management should enhance the design of the System’s controls related to the screening of new vendors prior to entering into transactions, as well as the on-going monitoring and screening of its vendors for suspension and debarment. In addition, management should perform and retain documentation to support reconciliation of the vendor list submitted to the third-party service provider and the results obtained to support that the screening process is completed for all vendors and that no suspended or debarred vendors are utilized by the System prior to entering into transactions. Views of Responsible Officials: Management agrees with the finding described above. Due to a system failure, vendor payment files from January through September 2024 were not transmitted to Mount Sinai’s sanction screening vendor. Mount Sinai has taken corrective actions to address this issue. All current vendors in our vendor master file, as well as all new vendors added through our new vendor credentialing process, are now processed through our sanction screening vendor on a monthly basis. In addition, a new manual control has been implemented to review, confirm, and reconcile to ensure that the vendor master file has been transmitted successfully, and all vendors are screened for sanctions, and a report thereof is provided each month. Our process will also document and maintain evidence that unverified vendors or those that were indicated as excluded were investigated and evaluated by the Health System. We will also periodically perform independent sanction screening checks on a sample of our vendors to validate the accuracy of the results of our third-party sanction screening vendor.