Audit Finding Reference Number Questioned Cost 2024 – 009 – Pell Grant Calculations $5,546 Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal PELL Grant Program (PELL) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria Title IV regulations, 34 CFR Section §690.62 (a) stipulates that the amount of a student’s Pell Grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each year. Each student’s Pell grant is based upon their enrollment status, cost of attendance and expected family contribution. Condition and Context During my audit I noted two (2) students out of eighty-seven (87) tested whose Pell grant amount was calculated incorrectly. This resulted in ABC over-disbursing Pell in the amount of $5,546. Cause ABC did not establish, implement and review adequate internal controls to ensure Federal Pell Grant awards were accurately calculated prior to disbursement. Specifically, management did not perform adequate reviews of Pell Grant award calculations or reconcile award information maintained in Jenzabar to supporting student eligibility information before disbursing Title IV funds. Questioned Costs For purposes of this condition, I have questioned costs totaling $5,546. Effect As a result of these deficiencies, Federal Pell Grant funds were over-disbursed by $5,546 to two (2) students. Consequently, ABC did not comply with federal eligibility and award calculation requirements, resulting in questioned costs of $5,546 and increasing the risk that Title IV funds were awarded in amounts exceeding those permitted under federal regulations. Repeat Finding Yes. See Schedule of Prior Year Audit Finding 2023-009. Recommendation I recommend that ABC strengthen its internal controls over the Federal Pell Grant awarding process by implementing procedures to ensure Pell Grant awards are accurately calculated prior to disbursement. Management should utilize Jenzabar system controls and award calculation reports to verify student eligibility, enrollment status, and award amounts, perform documented supervisory reviews of Pell Grant calculations before disbursement, and promptly identify and correct any award discrepancies to ensure compliance with federal regulations. Management’s Response The Institution concurs with this finding. Arkansas Baptist College will adhere to its policies, procedures, processes, and federal guidelines as it relates to calculating and awarding Pell. Arkansas Baptist College will return any ineligible Management funds accordingly.
Audit Finding Reference Number 2024 - 003 - Common Origination and Disbursement (COD) System Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal Pell Grant Program (PELL) 84.268 Federal Direct Student Loan (Direct) Federal Award Year June 30, 2024 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR 200, Subpart F Compliance Supplement, Part 5 - Student Financial Assistance Programs, Section (L) (1) Financial Reporting, indicates that schools submit PELL origination records and disbursement records to the COD system. Key items on the origination records are social security number, award amount, enrollment date, verification status code, transaction number, cost of attendance, and academic calendar. Institutions must report student payment data within 30 calendar days after the school makes a payment; or become aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Condition and Context I noted the following conditions during my testing of the COD system: • Accuracy of COD Reporting - The PELL amount was disbursed in the COD system did not agree to the students’ billing statements for seven (7) students out of eighty-two (82). The billing statements over reported $17564; • Accuracy of COD Reporting - The Direct loan amounts disbursed in the COD system did not agree to the students’ billing statements for six (6) students out of seventy-five (75) tested. The billing statements over reported $12,472; • Accuracy of COD Reporting - The enrollment date was incorrectly reported in COD for sixty-seven (67) students out of ninety-eight (98) tested; • Completeness of Documentation - The PELL Award Detail Information screen was not provided for four (4) of the eighty-two (82) tested to ensure the origination records were properly recorded; • Accuracy of COD Reporting - The cost of attendance budget as report in COD did not agree to the cost of attendance per the College’s records for two (2) of the eighty-two (82) students tested; • Completeness of Documentation - The COD PELL and Direct Loan disbursement records were not provided for fifteen (15) of the ninety-eight (98) students tested; • Timeliness of Reporting - The Direct Loan disbursements were made in COD before posting to the students’ account for eight (8) of the seventy-five (75) students tested; and • Timeliness of Reporting - The PELL and Direct Loan amounts were processed in COD more than fifteen (15) days after the amounts were posted to the students’ billing statement for thirty-three (33) of the eighty-two (82) students tested. Cause ABC did not establish and implement adequate internal controls over the preparation, review, reconciliation, and timely submission of origination and disbursement information reported to the Common Origination and Disbursement (COD) System. Specifically, management did not ensure that information reported to COD was reconciled to the institution's student financial aid and billing records, supporting documentation was maintained, and required reporting deadlines were consistently monitored and met. Questioned Costs For purposes of this condition, I have no questioned costs. Effect As a result of these deficiencies, ABC did not ensure that information reported to the Common Origination and Disbursement (COD) System was complete, accurate, and submitted within the required timeframes. Inaccurate or untimely reporting to the COD System increases the risk that the U.S. Department of Education relies on erroneous student financial aid information, which could result in incorrect Title IV program records, delays in identifying or correcting reporting errors, and noncompliance with federal reporting requirements. Repeat Finding Yes. See Schedule of Prior Year Audit Finding 2023-003. Recommendation I recommend that ABC strengthen its internal controls over the Common Origination and Disbursement (COD) reporting process by: • Implementing procedures to ensure all origination and disbursement records reported to COD are complete, accurate, and supported by the institution's financial aid and student account records. • Performing documented reconciliations between the COD System, the student information system, and student billing records on a regular basis. • Establishing procedures to ensure all required supporting documentation, including origination and disbursement records, is maintained and readily available for review. • Implementing monitoring procedures to ensure student disbursements and adjustments are reported to the COD System within the required federal timeframes. • Requiring supervisory review of COD reporting and reconciliations to identify and correct reporting discrepancies before submission. Management's Response The Institution concurs with this finding. Arkansas Baptist College will ensure the accuracy of the data that is input into the COD system, and Arkansas Baptist College will work to apply funds appropriately to students' accounts. Arkansas Baptist College will review, revise, and adhere to its practices, policies, and procedures along with federal guidelines as it relates to managing the COD system.
Audit Finding Reference Number 2024 - 004 - Student Credit Balance Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal Pell Grant Program (PELL) 84.268 Federal Direct Student Loans (Direct) Federal Award Year June 30, 2024 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR 200, Subpart F Compliance Supplement, Part 5 Student Financial Assistance Programs, Section III Part N – Special Tests and Provisions stipulate that disbursements to students must be made in accordance with required time frames. Title IV regulations 34 CFR §668.164 (e) specifies that whenever a school credits Student Financial Aid (SFA) program funds to a student’s account, and those funds exceed the student’s allowable charges, an SFA credit balance occurs. The school must pay the credit balance to the student as soon as possible, but no later than fourteen (14) days after the later of the date the balance occurred on the student’s account or the first day of classes of the payment period. Condition and Context I noted during my audit eighteen (18) out of ninety-eight (98) students had student financial aid credit balances, but ABC did not refund the credit balances to the students within the fourteen (14) day requirement. Cause ABC did not establish and implement adequate internal controls to ensure Student Financial Aid (SFA) credit balances were identified, monitored, and refunded to students within the timeframes required by federal regulations. Specifically, management did not have effective procedures in place to monitor outstanding credit balances and ensure timely processing of student refunds. Questioned Costs For purposes of this condition, I have no questioned costs. Effect As a result of these deficiencies, eighteen (18) students did not receive their Student Financial Aid credit balances within the timeframe prescribed by federal regulations. Failure to timely refund credit balances may adversely affect students' ability to meet educational expenses and exposes the institution to increased regulatory scrutiny and potential sanctions for noncompliance with Title IV requirements. Repeat Finding Yes. See Schedule of Prior Year Audit Finding 2023-004. Recommendation I recommend that ABC strengthen its internal controls over the Student Financial Aid credit balance process by implementing procedures within Jenzabar to identify and monitor students with Title IV credit balances. Management should utilize available system reports to regularly review outstanding credit balances, ensure refunds are processed within the fourteen (14) day requirement, maintain documentation supporting the date the credit balance occurred and the date the refund was issued, and require supervisory review to verify the completeness, accuracy, and timeliness of student refunds. Management’s Response The Institution concurs with this finding. Arkansas Baptist College will review and adhere to its practices, policies, and procedures along with federal regulations as it relates to resolving credit balances. Arkansas Baptist College will resolve credit balances in a timely manner within the 14-day period as defined in the Federal guidelines.
Audit Finding Reference Number 2024 – 006 – Student Withdrawal Monitoring Federal Program and Specific Federal Award Identification ALN Title and Number 84.268 Federal Direct Student Loans (Direct) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR Part 200, Subpart F, Compliance Supplement, Part 5 – Student Financial Assistance Programs, Special Tests and Provisions – Enrollment Reporting and Return of Title IV Funds, requires institutions to establish procedures to identify students who withdraw from the institution and to administer Title IV financial assistance in accordance with federal regulations. Institutions are responsible for maintaining complete and accurate records of students who withdraw to ensure compliance with applicable Title IV requirements, including determining continued eligibility for Title IV assistance and, when applicable, performing Return of Title IV Funds calculations. Condition and Context During my audit, I noted that one (1) of two (2) students who received Federal Direct Loan funds and withdrew and did not appear on ABC's withdrawal listing. As a result, ABC did not provide documentation demonstrating that the student's withdrawal was identified and evaluated in accordance with Title IV requirements. Consequently, I was unable to determine whether the student remained eligible to receive the Direct Loan funds or whether a Return of Title IV Funds calculation was required. Cause ABC did not establish and implement adequate internal controls to ensure all students who withdrew from the institution were identified, included on the official withdrawal listing, and evaluated for compliance with applicable Title IV requirements. Specifically, procedures were not sufficient to ensure complete and accurate communication between the Registrar's Office and the Financial Aid Office regarding student withdrawals. Questioned Costs For purposes of this condition, I do not have any questioned costs. Effect As a result of these deficiencies, ABC was unable to demonstrate that all students who withdrew were evaluated for continued Title IV eligibility and compliance with applicable federal requirements. Consequently, the institution could not support that the student remained eligible for the Federal Direct Loan funds received or that all required post-withdrawal procedures, including a Return of Title IV Funds determination, were appropriately performed. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over the student withdrawal process by implementing procedures to ensure all student withdrawals are accurately identified, documented, and communicated timely between the Registrar's Office and the Financial Aid Office. Management should reconcile withdrawal records maintained in Jenzabar with financial aid records on a regular basis, verify that all withdrawn students are evaluated for continued Title IV eligibility and Return of Title IV Funds requirements, and require supervisory review of the reconciliation process to ensure no withdrawn students are omitted from the withdrawal listing. Management’s Response The Institution concurs with this finding. The College accepts the recommendation and will continue to enhance and strengthen its internal controls over the student withdrawal process by implementing procedures to ensure all student withdrawals are accurately identified, documented, and communicated in a timely manner between the Registrar's Office and the Financial Aid Office. The Institution will implement strong processes to reconcile withdrawal records maintained in Jenzabar with financial aid records on a regular basis, verify that all withdrawn students are evaluated for continued Title IV eligibility and Return of Title IV Funds requirements, and require supervisory review of the reconciliation process to ensure no withdrawn students are omitted from the withdrawal listing.
Audit Finding Reference Number Questioned Costs 2024 – 011 – Aggregate Loan Limits $ 18,651 Federal Program and Specific Federal Award Identification ALN Title and Number 84.268 Federal Direct Student Loans (Direct) Federal Award Year June 30, 2024 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria CFR §685.203 (d) stipulates the aggregate unpaid principal amount of all Direct subsidized loans made to a student but excluding the amount of capitalized interest may not exceed (1) for dependent undergraduate students $31,000, (2) for independent undergraduate student or dependent undergraduate who qualifies for additional eligibility, $57,500 and (3) for graduate or professional students, $138,500. The total amount of Direct subsidized loans but excluding the amount of capitalized interest may not exceed $23,000 for a dependent undergraduate student. Condition and Context I noted during my audit that six (6) students out of twenty-five (25) tested received direct loans in excess of the aggregate loan limit. Cause It appears that ABC did not ensure that the student was eligible to receive the loan proceeds. Questioned Costs For purposes of this condition, I have questioned costs totaling $18,651 related to the Direct loan program. Effect ABC has not adhered to Title IV regulations regarding the disbursing of loan funds in accordance with the regulations. Repeat Finding Yes. See Schedule of Prior Year Audit Findings 2023-011. Recommendation I recommend that the management of ABC take immediate steps to ensure that students receive their loan funds as required by Title IV regulations. Management Response The Institution concurs with this finding and accepts the recommendation for leadership to implement immediate steps to ensure that students receive their loan funds as required by Title IV regulations.
Audit Finding Reference Number Questioned Costs 2024 – 013 – Annual Loan Limit / PLUS Denial $10,400 Federal Program and Specific Federal Award Identification ALN Title and Number 84.268 Federal Direct Student Loans (Direct) Federal Award Year June 30, 2024 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR Part 200, Subpart F, Compliance Supplement, Part 5 – Student Financial Assistance Programs, Eligibility, requires institutions to determine student eligibility for Title IV assistance and ensure awards are made in accordance with applicable federal requirements. Title IV regulations, 34 CFR §685.203(c), provide that dependent undergraduate students may receive additional Federal Direct Unsubsidized Loan funds only if the student's parent is unable to obtain a Direct PLUS Loan or another applicable exception applies. Institutions must maintain documentation supporting the student's eligibility for the additional unsubsidized loan amount and ensure annual loan limits are not exceeded. Students whose parents are likely to be precluded by exceptional circumstances from receiving a PLUS loan may be eligible for an unsubsidized loan beyond the base amount of $2,000. Condition and Context During my audit, I noted that four (4) of fifty (50) dependent students tested received Federal Direct Unsubsidized Loans in excess of the $2,000 additional unsubsidized loan amounts permitted under federal regulations without documentation of a parental PLUS denial. Cause ABC did not establish, implement and monitor adequate internal controls to ensure Federal Direct Loan awards complied with annual loan limits and eligibility requirements. Specifically, management did not verify that dependent students receiving additional unsubsidized loan funds had a documented Direct PLUS Loan denial or other qualifying documentation prior to awarding and disbursing the loans. Questioned Costs For purposes of this condition, I have questioned costs totaling $10,400 related to the Direct loans. Effect As a result of these deficiencies, ABC awarded Federal Direct Unsubsidized Loan funds in excess of the amounts permitted by federal regulations without maintaining documentation supporting the students' eligibility for the additional loan amounts. Consequently, the institution did not demonstrate compliance with Title IV eligibility requirements, increasing the risk that Federal Direct Loan funds were over awarded to ineligible students. This exception resulted in questioned costs of $10,400. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over the Federal Direct Loan awarding process by implementing procedures to ensure dependent students are awarded additional Federal Direct Unsubsidized Loan funds only when they meet the eligibility requirements prescribed by federal regulations. Management should utilize Jenzabar to identify students receiving additional unsubsidized loan funds, verify and retain documentation of Direct PLUS Loan denials or other qualifying exceptions before disbursement, establish system edits or manual review procedures to prevent awards from exceeding applicable annual loan limits, and require supervisory review of all additional unsubsidized loan awards prior to disbursement. Management’s Response The Institution concurs with this finding. Under new leadership, Arkansas Baptist College accepts the recommendation to strengthen its internal controls over the Federal Direct Loan awarding process by implementing procedures to ensure dependent students are awarded additional Federal Direct Unsubsidized Loan funds only when they meet the eligibility requirements prescribed by federal regulations. Leadership will continue to utilize Jenzabar to identify students receiving additional unsubsidized loan funds, verify and retain documentation of Direct PLUS Loan denials or other qualifying exceptions before disbursement, establish system edits or manual review procedures to prevent awards from exceeding applicable annual loan limits, and require supervisory review of all additional unsubsidized loan awards prior to disbursement.
Audit Finding Reference Number Questioned Cost 2024 - 002 - Return of Title IV Funds $54,799 Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal Pell Grant Program (PELL) 84.268 Federal Direct Student Loan (Direct) 84.007 Federal Supplemental Educational Opportunity Grants (SEOG) Federal Award Year June 30, 2024 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR 200, Subpart F Compliance Supplement, Part 5 Section (N) (3) specifies that when a student receives Title IV assistance and withdraws from an institution, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. The difference between any amounts earned that is less than the amount disbursed must be returned to the Title IV program within the prescribed time frame. ABC is a college that is not required to take attendance. Thus, ABC must determine the student’s withdrawal date as either (1) the date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (2) the date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw; (3) if the student ceases attendance without providing official notification to the institution of his or her withdrawal, the midpoint of the payment period or, if applicable, the period of enrollment; (4) if the institution determines that a student did not begin the withdrawal process or otherwise notify the institution of the intent to withdraw due to illness, accident, grievous personal loss or other circumstances beyond the student’s control, the date the institution determines is related to that circumstances, (5) if a student does not return from an approved leave of absence, the date that the institution determines the student began the leave of absence; or (6) if the student takes an unapproved leave of absence, the date that the student began the leave of absence. Condition and Context During my audit, I noted the following: • Withdrawal Date Documentation - ABC did not provide documentation to support the students’ withdrawal date for three (3) of the five (5) students selected for the Return of Title IV Funds testing. As such, I was unable to ensure the Return of Title IV Funds calculation was prepared correctly as well as if the correct amount of funds were returned by ABC; • Missing Return of Title IV Funds Calculations - Three (3) students received Title IV aid and withdrew from ABC but did not have a Return of Title IV Funds calculation on file; • Incorrect Return of Title IV Funds Calculation - The “total days” per the Return of Title IV Funds calculation was incorrectly calculated for one (1) student out of one (1) tested for the Spring 2025 semester. ABC did not provide support for the student’s withdrawal date. As such, I could not determine what amount was required to be returned by ABC. The student received $6,919 comprised of $3,697 in PELL, $500 in SEOG, $990 in Unsubsidized loans and $1,732 in Subsidized loans. Since the withdrawal date is undetermined, the entire Title IV aid package may be required to be returned; and • Non-Passing Grades - ABC was unable to document the last date of attendance or participation in any academic related activity for each of the students’ enrolled courses and received all non-passing grades for six (6) of the six (6) students selected for testing resulting in $47,880 to be returned by ABC. Cause ABC did not have adequate internal controls over the Return of Title IV Funds calculation process to ensure that withdrawal dates were properly documented, Return of Title IV Funds calculations were completed for all applicable students, and sufficient documentation was maintained to support the calculations. In addition, procedures were not in place to ensure that academic participation was adequately documented for students who received all non-passing grades and that the Return of Title IV Funds process was performed in accordance with federal requirements. Questioned Costs For purposes of this condition, I have questioned costs totaling $54,799 as follows: Program Amount Federal PELL Grant $ 25,884 Federal Supplemental Educational Opportunity Grant 3,500 Federal Direct Loan 25,415 Total $ 54,799 Effect As a result of the deficiencies noted, ABC was unable to demonstrate compliance with the Return of Title IV Funds calculation requirements. Without adequately documenting withdrawal dates and maintaining complete Return of Title IV Funds calculations, ABC cannot ensure that Title IV aid earned by withdrawing students is accurately calculated or that unearned Title IV funds are returned to the appropriate federal programs within the required timeframe. Consequently, the Department of Education may have overpaid Title IV assistance to students, resulting in questioned costs of $54,799 and increasing the risk of noncompliance with federal regulations. Repeat Finding Yes. See Schedule of Prior Year Audit Finding 2023-002. Recommendation I recommend that ABC strengthen its internal controls over the Return of Title IV Funds calculation process by: • Establishing procedures to ensure withdrawal dates are consistently identified and adequately documented in accordance with federal regulations; • Performing and retaining a Return of Title IV Funds calculation for every student who withdraws or otherwise requires an R2T4 determination; • Implementing procedures to document students' last dates of attendance or academically related activity for students receiving all non-passing grades; • Requiring supervisory review of Return of Title IV Funds calculations to verify the accuracy of the withdrawal date, total days in the payment period, and amounts earned and returned; and • Providing periodic training to financial aid and registrar personnel regarding the federal Return of Title IV Funds requirements. Management's Response The Institution concurs with this finding. Under new and experienced leadership, Arkansas Baptist College will implement processes to ensure accurate attendance and participation records. Arkansas Baptist College will calculate R2T4s accurately and will return the funds in a timely manner. Arkansas Baptist College will review and adhere to its practices, policies, and procedures along with federal guidelines as it relates to R2T4 regulations.
Audit Finding Reference Number Questioned Cost 2024 – 005 – Verification $4,887 Federal Program and Specific Federal Award Identification ALN Title and Number 84.033 Federal Work Study Program (FWS) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR Part 200, Subpart F, Compliance Supplement, Part 5 – Student Financial Assistance Programs, Special Tests and Provisions – Verification, requires institutions participating in the Title IV programs to verify certain applicant information for students selected for verification by the U.S. Department of Education or selected by the institution. Before disbursing Title IV funds, the institution must obtain, review, and retain the documentation necessary to verify the required applicant information and resolve any conflicting information in accordance with Title IV regulations. 34 CFR §668.51–668.61 establish the federal verification requirements for applicants selected for verification. Institutions must obtain and retain documentation supporting the verification of required applicant information before disbursing Title IV assistance, except as otherwise permitted by federal regulations. Condition and Context During my audit, I noted that one (1) student out of nine (9) students selected for verification testing where ABC did not provide all documentation required to support that the student's verification was completed in accordance with federal requirements. As a result, I was unable to determine whether all required verification procedures were performed prior to the disbursement of Title IV financial assistance. Cause ABC did not establish and implement adequate internal controls to ensure that all documentation supporting the verification process was obtained, reviewed, and retained in accordance with federal requirements. Specifically, management did not maintain complete verification files to demonstrate compliance with Title IV verification requirements. Questioned Costs For purposes of this condition, I have questioned costs totaling $4,887 related to the Federal Work Study program. Effect As a result of these deficiencies, ABC was unable to demonstrate compliance with the federal verification requirements for students selected for verification. Without maintaining adequate supporting documentation, the institution cannot ensure that Title IV eligibility was properly determined prior to the disbursement of federal financial aid, increasing the risk that aid may have been awarded based on inaccurate or unverified information. Consequently, questioned costs of $4,887 were identified. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over the Title IV verification process by implementing procedures to ensure all required verification documentation is obtained, reviewed, and retained prior to disbursing Title IV financial assistance. Management should utilize Jenzabar to monitor students selected for verification, maintain complete verification files supporting all required verification procedures, and require supervisory review to verify that all required documentation has been received and eligibility has been established before aid is awarded or disbursed. Management’s Response The Institution, Arkansas Baptist College, accepts the recommendation and will continue to work and strengthen its internal controls over the verification process by implementing procedures to ensure that all required verification documentation is obtained, reviewed, and retained prior to disbursing Title IV financial assistance. Management should utilize Jenzabar to monitor students selected for verification, maintain complete verification files supporting all required verification procedures, and require an additional level review to verify the required documentation has been received and eligibility has been established before aid is awarded or disbursed.
Audit Finding Reference Number Questioned Costs 2024 – 007 – Satisfactory Academic Progress $118,387 Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loan (Direct) 84.007 Federal Supplemental Educational Opportunity Grants (SEOG) 84.033 Federal Work Study Program (FWS) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria Title IV regulations, 34 CFR §668.32 (f) stipulates that students participating in the Title IV Federal Financial Aid program must be maintaining satisfactory progress in the course of study he or she is pursuing, according to the standards and practices of that institution to receive student financial aid. OMB 2 CFR 200, Subpart F Compliance Supplement, Part 5 Appendix A, Student Financial Assistance – Special Tests and Provisions Compliance Requirement Number 9 – Satisfactory Academic Progress stipulates that a student must maintain good standing, or satisfactory progress. Title IV regulations CFR §668.16 (e) stipulates that an institution must establish, publish and apply reasonable standards for measuring satisfactory academic progress. Condition and Context During my audit, I noted that twelve (12) of the eighty-seven (87) students tested were awarded and received Title IV financial assistance even though they did not meet ABC's published satisfactory academic progress standards. In addition, ABC did not maintain approved satisfactory academic progress appeal documentation to support the students' continued eligibility to receive Title IV financial assistance. Cause ABC did not establish and implement adequate internal controls to ensure students' satisfactory academic progress was evaluated in accordance with institutional policy and federal regulations prior to awarding and disbursing Title IV financial assistance. Specifically, management did not ensure that students who failed to meet satisfactory academic progress standards either had an approved and adequately documented satisfactory academic progress appeal on file or were determined to be eligible before Title IV funds were disbursed. Questioned Costs For the purpose of this condition, I have questioned costs totaling $118,387 as follows: Program Amount Federal PELL $ 59,584 Federal SEOG 6,500 Federal Work Study 1,400 Federal Direct Loan 50,903 Total $118,387 Effect As a result of these deficiencies, Title IV financial assistance was awarded and disbursed to students who did not meet ABC's satisfactory academic progress standards and did not have sufficient documentation supporting continued eligibility through the satisfactory academic progress appeal process. Consequently, the institution did not demonstrate compliance with federal eligibility requirements, resulting in questioned costs of $118,387 and increasing the risk that Title IV funds were awarded to ineligible students. Repeat Finding Yes. See prior year finding 2023-007. Recommendation I recommend that ABC strengthen its internal controls over the satisfactory academic progress process by implementing procedures to ensure students' eligibility for Title IV financial assistance is evaluated prior to awarding and disbursing funds. Management should require that satisfactory academic progress evaluations are performed in accordance with institutional policy, maintain complete documentation supporting all satisfactory academic progress determinations and approved appeals, utilize Jenzabar system controls and reports to identify students who do not meet satisfactory academic progress requirements before disbursement, and require supervisory review of students approved through the appeal process to ensure compliance with federal regulations. Management’s Response The Institution concurs with this finding. Arkansas Baptist College will review and adhere to its practices, policies, and procedures along with federal guidelines as it relates to students meeting satisfactory academic progress. Arkansas Baptist College has an SAP appeal committee in place to enforce and abide by Arkansas Baptist College's policy.
Audit Finding Reference Number Questioned Cost 2024 – 008 – Aid in Excess of Documented Need $ 3,174 Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loans (Direct) 84.033 Federal Work Study Program (FWS) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria Uniform Guidance Compliance Supplement, Part 5 Section E (Eligibility) specified that the annual award should be calculated based upon certain factors and coordinated among all programs to ensure that the total aid is not awarded in excess of the student’s financial need. Title IV regulations, Section(s) 673.5, 682.603, and 685.301 state that an institution may not award financial aid to a student if the aid, when combined with other resources, exceeds the student’s financial need. Condition and Context During my audit I noted one (1) student out of eighty-seven (87) tested received financial aid in excess of their documented need. Cause ABC did not establish, implement or monitor adequate internal controls to ensure Title IV financial aid awards were reviewed and coordinated prior to disbursement to prevent total financial assistance from exceeding a student's documented financial need. Specifically, management did not ensure that all sources of financial assistance were considered when determining the student's eligibility for need-based aid. Questioned Costs For purposes of this condition, I have questioned costs totaling $3,174 as follows: Program Amount Federal Pell Grant $ 1,016 Federal Work Study 285 Federal Direct Loan 1,873 Total $ 3,174 Effect As a result of these deficiencies, one (1) student received Title IV financial assistance in excess of the student's documented financial need. Consequently, ABC did not demonstrate compliance with federal eligibility requirements, resulting in questioned costs of $3,174 and increasing the risk that federal financial aid funds were awarded in excess of allowable amounts. Repeat Finding Yes. See Schedule of Prior Year Audit Finding 2023-008. Recommendation I recommend that ABC strengthen its internal controls over the financial aid awarding process by implementing procedures to ensure all Title IV awards are reviewed and coordinated prior to disbursement to prevent aid from exceeding a student's documented financial need. Management should utilize Jenzabar reports and system edits, where available, to identify potential over awards, perform documented reviews of students' financial aid packages before funds are disbursed, promptly resolve identified over awards, and require supervisory review of award adjustments to ensure compliance with federal regulations. Management’s Response The Institution concurs with this finding. Under new leadership, Arkansas Baptist College will adhere to its policies, procedures, processes, and federal guidelines as it relates to over-awarding students, as well as ensure automated processes are implemented properly and fully tested to ensure such.
Audit Finding Reference Number 2024 – 010 – Late Submission of Audit Report Federal Program and Specific Federal Award Identification ALN Title and Number 84.007 Federal Supplemental Educational Opportunity Grants (SEOG) 84.033 Federal Work-Study Program (FWS) 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loans (Direct) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria Pursuant to the requirement of Uniform Guidance 2 CFR Part 200 §512(a), Single audits are required to be completed and the data collection form and reporting package submitted within the earlier of thirty (30) days after receipt of the auditor’s report, or nine (9) months after the end of the audit period. If the due date falls on a Saturday, Sunday, or federal Holiday, the reporting package is due the next business day. Condition and Context The June 30, 2024 Single Audit reporting package, including the Data Collection Form, was not submitted within the timeframe required by 2 CFR 200 §512 (a). Specifically, the reporting package remained outstanding more than nine (9) months after the entity’s fiscal year. Cause ABC did not establish and implement adequate procedures to ensure the Single Audit was completed and the reporting package, including the Data Collection Form, was submitted within the timeframe required by Uniform Guidance. Specifically, management did not effectively monitor the audit reporting timeline or provide the information necessary to facilitate timely completion and submission of the audit report. Questioned Costs For purposes of this condition, I have no questioned cost. Effect As a result, ABC did not comply with the reporting requirements of Uniform Guidance 2 CFR Part 200 §512 (a) by failing to submit the Single Audit reporting package within the required timeframe. Untimely submission of the audit report may delay federal agencies' oversight of the institution's administration of federal awards and may subject the institution to increased monitoring or other administrative actions by the federal awarding agency. Repeat Finding Yes. See Schedule of Prior Year Audit Finding 2023-010. Recommendation I recommend that ABC strengthen its procedures for monitoring the Single Audit reporting process to ensure the audit is completed and the reporting package is submitted within the timeframe required by Uniform Guidance. Management should establish an audit timeline with key milestones, assign responsibility for providing requested financial records and supporting documentation to the auditors on a timely basis, periodically monitor progress toward the submission deadline, and implement supervisory oversight to ensure compliance with the reporting requirements of 2 CFR §200.512(a). Management’s Response The Institution concurs with this finding. With new leadership and administration, Arkansas Baptist College will adhere to its policies, procedures, processes, and federal guidelines as it relates to completing and submitting the audit. Arkansas Baptist College has a new CFO and controller. These measures will ensure stability and a timely audit.
Audit Finding Reference Number 2024 – 012 – Inaccurate Aid Disbursement Records Federal Program and Specific Federal Award Identification ALN Title and Number 84.007 Federal Supplemental Educational Opportunity Grants (SEOG) 84.033 Federal Work-Study Program (FWS) 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loans (Direct) Federal Award Year June 30, 2024 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR Part 200, Subpart F, Compliance Supplement, Part 5 – Student Financial Assistance Programs, Financial Reporting, requires institutions to maintain complete and accurate records supporting the administration of Title IV programs. Institutions are responsible for ensuring that records used to administer, reconcile, and report Title IV financial assistance accurately reflect student financial aid activity and are supported by the institution's official financial aid and student account records. Condition and Context During my audit, I noted that ten (10) students were included on ABC's 2023–2024 Title IV aid disbursement report used to support Title IV financial aid activity indicating that Title IV financial assistance had been disbursed. However, the students' billing statements indicated that no Title IV financial assistance was received during the 2023–2024 award year. Consequently, ABC's 2023–2024 Title IV aid disbursement report used to support Title IV financial aid activity was not complete and accurate, and I was unable to rely on the institution's disbursement report for those students. Cause ABC did not establish and implement adequate internal controls to ensure Title IV disbursement records were complete, accurate, and reconciled to the institution's student financial aid and billing records. Specifically, management did not perform periodic reconciliations or supervisory reviews to verify that students included on the Title IV disbursement report had corresponding Title IV disbursements recorded in the student accounting records. Questioned Costs For purposes of this condition, I do not have any questioned costs. Effect As a result of these deficiencies, ABC maintained inaccurate Title IV disbursement records. Inaccurate disbursement records increase the risk that Title IV financial aid activity may be incorrectly reported, reconciliations may not identify errors in a timely manner, and management cannot demonstrate the accuracy and completeness of records supporting the administration of federal student financial assistance programs. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over Title IV disbursement reporting by implementing procedures to ensure Title IV disbursement reports are complete, accurate, and reconciled to the institution's financial aid and student accounting records. Management should utilize Jenzabar reports to reconcile Title IV disbursement activity to student billing records on a regular basis, investigate and resolve discrepancies prior to using the reports for reporting or audit purposes, maintain documentation supporting reconciliations, and require supervisory review of the reconciliation process. Management’s Response The Institution concurs with this finding. Arkansas Baptist College accepts the recommendation to strengthen its internal controls over Title IV disbursement reporting by implementing procedures to ensure Title IV disbursement reports are complete, accurate, and reconciled to the institution's financial aid and student accounting records. Leadership will continue to work to enhance and utilize Jenzabar reports to reconcile Title IV disbursement activity to student billing records on a regular basis, investigate and resolve discrepancies prior to using the reports for reporting or audit purposes, maintain documentation supporting reconciliations, and require supervisory review of the reconciliation process.
Audit Finding Reference Number 2024 – 014 – Fiscal Operations Report and Application to Participate (FISAP) Federal Program and Specific Federal Award Identification ALN Title and Number 84.007 Federal Supplemental Educational Opportunity Grant (FSEOG) 84.003 Federal Work-Study Program (FWS) Federal Award Year June 30, 2024 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR Part 200, Subpart F, Compliance Supplement, Part 5 – Student Financial Assistance Programs, Financial Reporting, and 34 CFR §673.3 requires institutions participating in the Campus-Based Programs to prepare and submit the Fiscal Operations Report and Application to Participate (FISAP) in accordance with the requirements established by the U.S. Department of Education. Institutions are responsible for maintaining complete and accurate records supporting the information reported on the FISAP and must retain documentation sufficient to demonstrate the accuracy, completeness, and validity of the reported information. Conditions and Context During my audit, ABC did not provide supporting documentation to substantiate information reported on the Fiscal Operations Report and Application to Participate (FISAP). Specifically, the following supporting documentation was not provided for audit review: • Evidence supporting the submission of the FISAP. • Part II (Application), Section D, Line 7 – Total number of students for schools with a traditional calendar. • Part II (Application), Section D, Lines 9–20 – Total number of students for schools with a non-traditional calendar. • Part II (Application), Section E, Line 22 – Total tuition and fees. • Part II (Application), Section E, Line 23 – Total Federal Pell Grant expenditures. • Part II (Application), Section F, Lines 25–39 – Information on eligible aid applicants. • Part III (Perkins), Section A, Line 1.1 – Cash on hand and in depository. • Part IV (FSEOG), Section C, Lines 12–14 – Funds to FSEOG recipients. • Part V (FWS), Section C, Lines 12–14 – Total compensation for Federal Work-Study students. As a result, I was unable to determine whether the information reported on the FISAP was complete, accurate, and supported by the institution's records. Cause ABC did not establish and implement adequate internal controls to ensure documentation supporting the information reported on the FISAP was maintained and readily available for audit. Specifically, management did not maintain sufficient supporting records or implement procedures to retain documentation substantiating amounts and information reported on the FISAP. Questioned Cost For purposes of this condition, I do not have any questioned costs. Effect As a result of these deficiencies, ABC was unable to demonstrate that the information reported on the FISAP was complete, accurate, and prepared in accordance with federal requirements. Without adequate supporting documentation, the institution cannot substantiate information reported to the U.S. Department of Education, increasing the risk of inaccurate financial reporting and noncompliance with federal reporting requirements. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over the preparation and retention of documentation supporting the Fiscal Operations Report and Application to Participate (FISAP). Management should implement procedures to maintain complete supporting documentation for all amounts and information reported on the FISAP, reconcile reported information to the institution's financial aid, student information, and accounting records, retain evidence of the completed FISAP submission, and require supervisory review of the supporting documentation prior to submission of the report. Management Response The Institution concurs with this finding. With new leadership and processes, Arkansas Baptist College will continue to enhance and strengthen its internal controls over the preparation and retention of documentation supporting the Fiscal Operations Report and Application to Participate (FISAP). Leadership will continue to make changes to implement stronger procedures to maintain complete supporting documentation for all amounts and information reported on the FISAP, reconcile reported information to the institution's financial aid, student information, and accounting records, retain evidence of the completed FISAP submission, and require supervisory review of the supporting documentation prior to submission of the report.