Audit 396974

Material Weakness Finding Number: 2025-001 ALN # 84.063: Federal Program: Federal Pell Grant Program Federal Agency: U.S. Department of Education Contract Number and Year: P063P245378 and P063P242749, 2025 Compliance Requirement: Special Tests and Provisions – NSLDS Reporting Questioned Costs: N/A Criteria: Pursuant to 34 CFR §§ 685.309 and 690.83(b)(2), institutions are required to report student enrollment status changes to the National Student Loan Data System (NSLDS) within 30 days of the change or, alternatively, within 60 days through the submission of an enrollment reporting roster. At a minimum, institutions must certify enrollment data at least every 60 days. Reportable changes include, but are not limited to, adjustments in enrollment status, graduation, withdrawal, dropout, or failure to attend. In addition, institutions are required to review, correct, and return enrollment reporting rosters, including any necessary updates, within 15 days of receipt. Further, 2 CFR § 200.303 requires entities receiving federal awards to establish and maintain effective internal controls to ensure compliance with applicable laws and regulations. Condition: Testing of 80 Pell Grant recipients with enrollment status changes identified that the District did not accurately report 13 status changes (7 withdrawals and 6 graduations) to NSLDS. Additionally, for two of the four reporting periods tested, the District did not review, correct, and submit enrollment reporting rosters within the required 15-day timeframe. The District also did not consistently certify enrollment data at least every 60 days. These deficiencies occurred across multiple reporting periods. Cause: The deficiencies were attributable to staff turnover and training gaps, data transmission issues between the District’s third-party servicer (FAME) and NSLDS, and inconsistent processes for updating and certifying enrollment changes. As a result, controls over enrollment reporting were not consistently implemented or operating effectively. Effect: Failure to accurately and timely report enrollment status changes resulted in noncompliance with NSLDS reporting requirements and may impact the accuracy of student aid records maintained by the U.S. Department of Education. Recommendation: The District should strengthen internal controls over enrollment reporting by implementing procedures to ensure all enrollment status changes are accurately recorded, reconciled between internal systems and third-party servicer reports, and submitted to NSLDS within required timeframes. Additionally, the District should provide training to staff and establish monitoring controls to ensure timely review, correction, and certification of enrollment reporting rosters. Response: See attached Corrective Action Plan.