Audit 389075

Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the Common Origination and Disbursement (COD) system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for payment. The disbursement record reports the actual disbursement date and the amount of the disbursement. The Department of Education processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. 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 The OMB Compliance Supplement requires the following key items to be tested on origination records: award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and the academic start and end dates. Key items required to be on disbursement records are disbursement date and amount. KPMG identified that six out of forty students selected for testwork had either COD academic start or end dates that did not agree to the College’s records. The exceptions described above did not result in changes to the amounts awarded or disbursed to students by the College for the current fiscal year. Cause The condition resulted from the College’s internal control processes not operating consistently to ensure that all changes in enrollment information were accurately reported to COD. Specifically, the College’s control of reviewing the key items on the origination records for accuracy was not operating at a level of precision that would cover all key items. Possible Asserted Effect Failure to accurately report key items on origination records prevents the Department of Education from monitoring the Federal Direct Loan program requirements that are impacted by this data. 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 KPMG recommends that the College review and enhance its processes related to reporting key items on origination records to the COD to ensure that they are reporting such items accurately. Views of Responsible Officials Management concurs with the recommendation. To remediate this issue, the Student Aid Operations Department and the Registrar’s Office will implement an annual review and reconciliation of their students’ academic and origination records to ensure that key items are reported accurately to the COD. The Director of Aid Operations and Aid Operations team will supervise this control to ensure that it’s operating effectively.

Criteria Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS. The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSDLSFAP) website. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. 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 The OMB Compliance supplement requires testing the following key data elements reported to NSLDS in the Program-Level enrollment reporting: OPEID Number, CIP Code, CIP Year, Credential Level, Published Program Length Measurement, Published Program Length, Program Begin Date, Program Enrollment Status, and Program Enrollment Effective Date. During the performance of our testwork, the College identified that 31 of the 409 students who graduated during the year had enrollment statuses that did not agree between campus-level and program-level NSLDS data. Specifically, these 31 students’ enrollment statuses were correctly reported as graduated in the campus-level NSLDS data, but were inaccurately reported as withdrawn in the program-level NSLDS data. Cause The condition resulted from a gap in the College’s internal control processes. Specifically, the College did not implement a control to ensure that all changes in enrollment information were submitted accurately to NSLDS in both the program level and campus level data. Possible Asserted Effect Inaccurate submission of student enrollment status information and related program information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. 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 enrollment reporting to ensure that all key data elements are reported accurately to the NSLDS. Views of Responsible Officials Management concurs with the recommendation. To remediate this issue, management has implemented incremental controls over the enrollment reporting process to ensure alignment between campus-level and program-level data submitted to the NSLDS. These incremental controls include an automated validation control, monthly reconciliations and documented exception tracking, and enhanced monitoring and supervisory oversight.