Audit 386295

Criteria: Uniform Guidance 2 CFR 200.303(a) requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Additionally, the U.S. Department of Education regulations require institutions to notify students of Direct Loan disbursements and maintain sufficient documentation to demonstrate compliance with applicable disclosure and notification requirements, including 34 CFR 668.165(a) and 34 CFR 685.301. Condition: During testing of Direct Loans for a sample of 25 students, the auditors noted that for three students, AGS was unable to provide documentation demonstrating that required communications related to Direct Loan disbursements were provided to the students. Specifically, documentation evidencing the issuance, timing, and content of the required disbursement notifications was not retained. Cause: Management indicated that the institution did not have adequate internal control procedures in place to ensure retention and accessibility of documentation supporting that such communications were issued to students. Effect or Potential Effect: The absence of documented evidence supporting required Direct Loan disbursement communications represents a deficiency in internal control over compliance. While no improper disbursements were identified and no questioned costs resulted, this deficiency increases the risk that noncompliance with federal Direct Loan program requirements could occur and not be detected in a timely manner. Accordingly, the deficiency is considered a significant deficiency. Questioned Costs: None Auditee Response: AGS concurs with the auditors' findings and takes compliance very seriously. Corrective actions were implemented for the Fall 2025 term to ensure all students are notified of Direct Loan disbursements and that sufficient documentation is maintained.