Audit 382603

Assistance Listing Number, Federal Agency, and Program Name - 84.007, 84.063, 84.268; U.S. Department of Education; Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans Federal Award Identification Number and Year - P007A236053, P063P232857, P268K242857; 2024 2025 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes 2024-002 Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 668.22 outlines the requirements for institutions to follow when returns of Title IV funds are required, including identifying when calculations are necessary and the time frame in which they are required to be returned. Condition - There was a lack of internal controls in place related to the return of Title IV funds, which lead to two students with returns that were not issued timely and two students with error in return calculations. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - Once return calculations were identified and calculated, there were no controls in place to ensure that the calculations were complete, accurate, or returned in a timely manner. Cause and Effect - A lack of review of the processes to identify students who required a calculation, review the completed calculations for accuracy, or ensure that that all calculated returns were completed could lead to incomplete calculations, inaccurate calculations, or untimely return of funds once they are identified. Recommendation - We recommend that the College implement a review control that would cover each stage of the return process outlined. Views of Responsible Officials and Corrective Action Plan - The College has implemented procedures to verify that academic dates are entered accurately in Banner and confirmed by personnel other than those responsible for calculating and reviewing returns of Title IV funds. This should ensure the related calculations are complete and accurate, and the funds are returned in a timely manner.

Assistance Listing Number, Federal Agency, and Program Name - N/A, Schedule of Expenditures of Federal Awards (SEFA) Reporting Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Uniform Guidance (2 CFR 200.510(b)) requires a schedule of expenditures of federal awards (SEFA) that must provide total federal awards expended for the period covered by the auditee's financial statements. Federal awards expended in accordance with §200.502 should be based on when the underlying activity related to the federal award occurs. Condition - During our review of the schedule of expenditures of federal awards, we noted that certain federal program expenditures were included in the SEFA for the fiscal year ended June 30, 2025 even though the underlying activity occurred in 2024. The College did not have adequate controls in place to ensure the SEFA was prepared to include appropriate expenditures for the Economic Development Cluster in the proper period. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - During our review of the College's SEFA, we noted expenditures of $318,814 that were improperly included within the Economic Development Cluster in 2025. Based on review of underlying expenditures on vendor pay applications, expenditures should have been included on the SEFA in 2024. Cause and Effect - The College did not have adequate processes and internal control structure in place to ensure SEFA expenditures were recorded in the appropriate period. As a result, the SEFA is overstated by $318,814 in 2025. If the SEFA does not accurately reflect federal expenditures for the audit period, this could lead to misinterpretation of compliance requirements and inaccurate reporting to federal agencies. Recommendation - We recommend management implement procedures to ensure the SEFA preparation is based on the timing of the underlying activity rather than payment dates. Views of Responsible Officials and Planned Corrective Actions - The College will establish the proper controls to ensure that the SEFA is prepared based on the timing of the underlying activity rather than payment dates.