FAC Explorer

Audit 409

FY End
2023-05-31
Total Expended
$14.83M
Findings
4
Programs
8
Organization: Chowan University (NC)
Year: 2023 Accepted: 2023-10-10
Auditor: Bdo USA PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
216 2023-001 - - L
217 2023-002 - - N
576658 2023-001 - - L
576659 2023-002 - - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $6.48M Yes 2
84.425F Covid-19 Education Stabilization Fund - Institutional $4.05M Yes 0
84.063 Federal Pell Grant Program $2.62M Yes 0
84.425E Covid-19 Education Stabilization Fund - Student $640,543 Yes 0
84.425L Covid-19 Education Stabilization Fund - Msi $583,669 Yes 0
84.007 Federal Supplemental Educational Opportunity Grants $309,098 Yes 0
84.033 Federal Work-Study Program $138,105 Yes 0
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $5,658 Yes 0

Contacts

Name Title Type
FCHUCAM45V43 Stephanie Furlough Auditee
2523986538 Michael Botzis Auditor
No contacts on file

Notes to SEFA

Title: 1. Basis of Presentation Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) for the year ended May 31, 2023. The Schedule presents only a selected portion of the activities of Chowan University (the “University”). It is not intended to and does not present either the financial position, changes in activities, or cash flows of the University. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the “Schedule”) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) for the year ended May 31, 2023. The Schedule presents only a selected portion of the activities of Chowan University (the “University”). It is not intended to and does not present either the financial position, changes in activities, or cash flows of the University.
Title: 2. Summary of Significant Accounting Policies Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) for the year ended May 31, 2023. The Schedule presents only a selected portion of the activities of Chowan University (the “University”). It is not intended to and does not present either the financial position, changes in activities, or cash flows of the University. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying Schedule includes the federal grant transactions of the University recorded on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: 3. Indirect Cost Rate Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) for the year ended May 31, 2023. The Schedule presents only a selected portion of the activities of Chowan University (the “University”). It is not intended to and does not present either the financial position, changes in activities, or cash flows of the University. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The University has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: 4. Loans Outstanding Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) for the year ended May 31, 2023. The Schedule presents only a selected portion of the activities of Chowan University (the “University”). It is not intended to and does not present either the financial position, changes in activities, or cash flows of the University. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Chowan University liquidated its Federal Perkins Revolving Loan Fund at the direction of the Department of Education during the fiscal year ended May 31, 2023. The University had no loan balances outstanding at May 31, 2023, under the Federal Perkins Loan Program, Assistance Listing Number 84.038.
Title: 5. State Awards Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) for the year ended May 31, 2023. The Schedule presents only a selected portion of the activities of Chowan University (the “University”). It is not intended to and does not present either the financial position, changes in activities, or cash flows of the University. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During fiscal 2023, the University awarded $1,665,665 in North Carolina Need Based Scholarships, which is funding received from the state of North Carolina. Such funds were considered direct and material to the University.

Finding Details

Finding 2023-001
Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268) Criteria or Specific Requirement: L. Reporting – Common Origination and Disbursement (“COD”) System – All institutions receiving Direct Loans submit payment data to the Department of Education through the COD System. Institutions must report all loan disbursements and submit required records to the Direct Loan Servicing System (DLSS) via the COD no earlier than 7 days prior to making a disbursement of funds to a student (under the Advance or Heightened Cash monitoring 1 payment method), and no later than 15 days after the school makes a payment or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. (ED Notice, July 14, 2020, Federal Register (85 Federal Register 42368)). Condition: Instance was identified where the student payments data was not submitted within the required timeframe. Cause: Administrative oversight with respect to disbursement compliance requirements. Effect or Potential Effect: The University was not in compliance with the Direct Loan reporting compliance requirements. Questioned Costs: None. Context: For 1 of 25 students selected for testing, the student payment data was not submitted within the required timeframe. Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University enhance its procedures to ensure Direct Loan payment data is submitted to the Department of Education within the required timeframe. Views of Responsible Officials: The University Financial Aid Office has restructured the disbursement process as noted below: • Staff members will be retrained on the importance of timely reporting and record compliance. • A disbursement and documentation process will be created to track, manage, and reconcile the disbursement requests sent to COD. This process will aid in recognizing approved disbursements, rejected requests, and posting of disbursements. • The disbursement and reconciliation log will be reviewed by the Asst. Vice President for Student Financial Services as well as the Asst Vice President for Analytics & Audit.
Finding 2023-002
Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268) Criteria or Specific Requirement: Special Tests and Provisions – Disbursements to or on Behalf of Students – Federal Student Aid (“FSA”) Credit Balances - Where disbursements created a credit balance in the student account and the student or parent did not provide an authorization for the institution to retain funds, the institution must provide the credit balance amount to the student within 14 days of the date the balance was created (34 CFR 668.164(h)). Condition: Instance was identified where the University did not issue a refund within the required timeframe. Cause: Administrative oversight with respect to disbursement to or on behalf of students. Effect or Potential Effect: The University was not in compliance with disbursement to or on behalf of students. Questioned Costs: None. Context: For 1 of 10 students selected for testing, the University did not issue the refund within the required 14 days. Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University complete a timely review of credit balances in order to issue all refunds with respect to FSA credit balances within the required timeframe. Views of Responsible Officials: This instance was an administrative error. Measures are in place to process refunds on a weekly basis.
Finding 2023-001
Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268) Criteria or Specific Requirement: L. Reporting – Common Origination and Disbursement (“COD”) System – All institutions receiving Direct Loans submit payment data to the Department of Education through the COD System. Institutions must report all loan disbursements and submit required records to the Direct Loan Servicing System (DLSS) via the COD no earlier than 7 days prior to making a disbursement of funds to a student (under the Advance or Heightened Cash monitoring 1 payment method), and no later than 15 days after the school makes a payment or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. (ED Notice, July 14, 2020, Federal Register (85 Federal Register 42368)). Condition: Instance was identified where the student payments data was not submitted within the required timeframe. Cause: Administrative oversight with respect to disbursement compliance requirements. Effect or Potential Effect: The University was not in compliance with the Direct Loan reporting compliance requirements. Questioned Costs: None. Context: For 1 of 25 students selected for testing, the student payment data was not submitted within the required timeframe. Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University enhance its procedures to ensure Direct Loan payment data is submitted to the Department of Education within the required timeframe. Views of Responsible Officials: The University Financial Aid Office has restructured the disbursement process as noted below: • Staff members will be retrained on the importance of timely reporting and record compliance. • A disbursement and documentation process will be created to track, manage, and reconcile the disbursement requests sent to COD. This process will aid in recognizing approved disbursements, rejected requests, and posting of disbursements. • The disbursement and reconciliation log will be reviewed by the Asst. Vice President for Student Financial Services as well as the Asst Vice President for Analytics & Audit.
Finding 2023-002
Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268) Criteria or Specific Requirement: Special Tests and Provisions – Disbursements to or on Behalf of Students – Federal Student Aid (“FSA”) Credit Balances - Where disbursements created a credit balance in the student account and the student or parent did not provide an authorization for the institution to retain funds, the institution must provide the credit balance amount to the student within 14 days of the date the balance was created (34 CFR 668.164(h)). Condition: Instance was identified where the University did not issue a refund within the required timeframe. Cause: Administrative oversight with respect to disbursement to or on behalf of students. Effect or Potential Effect: The University was not in compliance with disbursement to or on behalf of students. Questioned Costs: None. Context: For 1 of 10 students selected for testing, the University did not issue the refund within the required 14 days. Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University complete a timely review of credit balances in order to issue all refunds with respect to FSA credit balances within the required timeframe. Views of Responsible Officials: This instance was an administrative error. Measures are in place to process refunds on a weekly basis.