FAC Explorer

Audit 50952

FY End
2022-06-30
Total Expended
$6.01M
Findings
2
Programs
1
Organization: Asbury Theological Seminary (KY)
Year: 2022 Accepted: 2022-12-01
Auditor: Blue & CO LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
61897 2022-001 Significant Deficiency - N
638339 2022-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $6.01M Yes 1

Contacts

Name Title Type
DMU3TRMLQ6J3 Jim Brumfield Auditee
8598582282 Allen Norvell Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards presents the activity of all federal financial assistance programs of the Asbury Theological Seminary (the Seminary). The grant revenue amounts received and expensed are subject to audit and adjustment. If any expenditure is disallowed by the grantor as a result of such an audit, any claim for reimbursement to the grantor would become a liability of the Seminary. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal laws and regulations. The Seminary did not elect to use the 10% de minimis indirect cost rate and no amounts were provided to subrecipients. The accompanying Schedule of Expenditures of Federal Awards is presented on the accrual basis of accounting. The information in this 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, therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. For the year ended June 30, 2022, the Seminary processed loans of $6,011,653 (net of loan and origination fees) of new loans under the Federal Direct Student Loans Program Assistance Listing Number (AL) No. 84.268, which includes unsubsidized and Plus loans for Graduate Students. The Seminary is responsible only for the performance of certain administrative duties with respect to the Federal Direct Student Loan Program. Accordingly, it is not practical to determine the balance of loans outstanding to students and former students of the Seminary under the program at June 30, 2022.

Finding Details

Finding 2022-001
Finding No. 2022-001: Enrollment Reporting; Federal Agency: U.S. Department of Education; AL Number and Title: 84.268 ? Federal Direct Student Loan Program; Criteria: Title 34, Section 685.304 of the CFR states that an institution must ensure that entrance counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan student borrower prior to making the first disbursement of the proceeds of a loan to a student borrower. Condition: During our audit, we noted that for 1 out of 40 students we selected for testing, the Seminary did not provide entrance counseling to a first-time borrower prior to disbursing the proceeds of the loan to the student borrower. Cause: The Seminary did not have a control in place to ensure timely completion of the entrance counseling. Effect: The Seminary did not comply with Title 34, Section 685.304 with respect to the above referenced first-time borrower. Recommendation: We recommend that the Seminary establish controls to ensure that first-time borrowers complete entrance counseling prior to the disbursement of funds to the student?s account. View of responsible officials: ATS agrees with the audit finding. With the Department of Education terminating Financial Awareness Counseling, this helps avoid confusing the two documents. To prevent disbursing future Title IV loan funds to student accounts without the proper entrance counseling on file, a new process has been implemented. The Associate Director of Financial Aid, Mariah Shumate, will now cross check each new disbursement record prior to requesting funds from the Department of Education.
Finding 2022-001
Finding No. 2022-001: Enrollment Reporting; Federal Agency: U.S. Department of Education; AL Number and Title: 84.268 ? Federal Direct Student Loan Program; Criteria: Title 34, Section 685.304 of the CFR states that an institution must ensure that entrance counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan student borrower prior to making the first disbursement of the proceeds of a loan to a student borrower. Condition: During our audit, we noted that for 1 out of 40 students we selected for testing, the Seminary did not provide entrance counseling to a first-time borrower prior to disbursing the proceeds of the loan to the student borrower. Cause: The Seminary did not have a control in place to ensure timely completion of the entrance counseling. Effect: The Seminary did not comply with Title 34, Section 685.304 with respect to the above referenced first-time borrower. Recommendation: We recommend that the Seminary establish controls to ensure that first-time borrowers complete entrance counseling prior to the disbursement of funds to the student?s account. View of responsible officials: ATS agrees with the audit finding. With the Department of Education terminating Financial Awareness Counseling, this helps avoid confusing the two documents. To prevent disbursing future Title IV loan funds to student accounts without the proper entrance counseling on file, a new process has been implemented. The Associate Director of Financial Aid, Mariah Shumate, will now cross check each new disbursement record prior to requesting funds from the Department of Education.