Audit 6550

Condition: Texas Guaranteed Student Loan Corporation d/b/a Trellis Company (Trellis) as a guarantor works with borrowers who qualify for the teacher loan forgiveness program. Quarterly, Trellis will perform a quality review of five applications to verify the applicant was eligible for forgiveness. During fiscal year 2023, the quarterly review process was not completed from October through August. In addition, Trellis did not have a compensating control in place to monitor the completeness and accuracy of the teacher loan forgiveness process. When brought to the attention of management, Trellis performed the quarterly reviews for fiscal year 2023 in arrears prior to yearend. To verify remediation efforts, two quarters were sampled with no exceptions noted. Criteria or Requirement: 2 CFR 200.303 requires non-Federal entities receiving Federal awards to 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 statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure teacher loan forgiveness applications are processed correctly. Cause: Trellis opted to not perform the quarterly quality review process over teacher loan forgiveness claims as the volume of loans has continued to decline over the last few years, there were no errors noted in prior quarterly reviews, and the personnel performing the processes remained consistent. Possible Asserted Effect: Trellis could have approved a teacher loan forgiveness application that was not eligible. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Trellis should reinstitute the quality control process. Views of Trellis Officials: Trellis agrees with this recommendation. Trellis reinstituted in arrears for fiscal year 2023 and is currently performing the quality reviews as described above for fiscal year 2023.

Condition: Texas Guaranteed Student Loan Corporation d/b/a Trellis Company (Trellis) as a guarantor works with borrowers who qualify for the teacher loan forgiveness program. Quarterly, Trellis will perform a quality review of five applications to verify the applicant was eligible for forgiveness. During fiscal year 2023, the quarterly review process was not completed from October through August. In addition, Trellis did not have a compensating control in place to monitor the completeness and accuracy of the teacher loan forgiveness process. When brought to the attention of management, Trellis performed the quarterly reviews for fiscal year 2023 in arrears prior to yearend. To verify remediation efforts, two quarters were sampled with no exceptions noted. Criteria or Requirement: 2 CFR 200.303 requires non-Federal entities receiving Federal awards to 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 statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure teacher loan forgiveness applications are processed correctly. Cause: Trellis opted to not perform the quarterly quality review process over teacher loan forgiveness claims as the volume of loans has continued to decline over the last few years, there were no errors noted in prior quarterly reviews, and the personnel performing the processes remained consistent. Possible Asserted Effect: Trellis could have approved a teacher loan forgiveness application that was not eligible. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Trellis should reinstitute the quality control process. Views of Trellis Officials: Trellis agrees with this recommendation. Trellis reinstituted in arrears for fiscal year 2023 and is currently performing the quality reviews as described above for fiscal year 2023.