Enrollment Reporting
Type of Finding - Noncompliance with Enrollment Reporting compliance requirement and material weakness in internal control over compliance
Program: Student Financial Assistance Cluster
Assistance Listing Number: Federal Pell Grants 84.063, Federal Direct Loans 84.268
Federal Agency: U.S. Department of Education
Criteria - 34 CFR 690.83(b)(2) and 34 CFR 685.309 provide regulations to institutions for the accurate and timely reporting of student enrollment information. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates to the Department of Education. The institution should have sufficient internal controls over program compliance to report information accurately and timely.
Condition - One student was found to have a status change that was not reported in accordance with the sixty-day requirements and two students were reported as less than half-time when they should have been reported as withdrawn per enrollment reporting guidelines.
Cause - The College’s system does not always report status changes correctly and the status report requires a review prior to submission. The internal controls over the review of student status changes were not effective at preventing or detecting and correcting noncompliance with the requirements.
Effect - The status changes were reported incorrectly and/or untimely to the Department of Education.
Questioned Costs - Not applicable.
Context - Out of our sample of 40 students with status changes, three students were found to have status changes reported that were not compliant with the enrollment reporting requirements.
Identification as a Repeat Finding - A similar finding was identified in the audit for the year ending June 30, 2022 as finding 2022-004.
Recommendation - The individual responsible for identifying effective status change dates needs to be educated on the requirements. The review of status changes for compliance with enrollment reporting requirements should be performed routinely and timely to verify compliance with the requirements.
Views of Responsible Official - Management concurs with the finding and is providing those responsible for compliance with appropriate education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis
Eligibility
Type of Finding - Noncompliance with Eligibility compliance requirement and material weakness in internal control over compliance
Program: Student Financial Assistance Cluster
Assistance Listing Number: Federal Pell Grants 84.063, Federal Direct Loans 84.268
Federal Agency: U.S. Department of Education
Criteria - 34 CFR 690.62 provides regulations to institutions to calculate an eligible student’s Federal Pell Grant. 34 CFR 685.200 provides regulations to institutions to determine eligibility and states that a Direct Subsidized Loan borrower must demonstrate financial need. The institution should have sufficient internal controls over compliance with direct and material compliance requirements to prevent or detect and correct material noncompliance in a timely manner.
Condition - Two errors were identified when testing the amount awarded for Federal Pell Grants and Federal Direct Loans.
One student was awarded an incorrect Federal Pell Grant amount. The student was awarded $6,845 when the student was eligible for $6,895. This resulted in an under-award of $50.
One student was awarded a subsidized Federal Direct Loan when there was no available need for a subsidized loan. The student was awarded $2,346 in subsidized loans.
Cause - A material weakness in internal control over compliance exists relating to eligibility. The internal controls over the review of awarded aid was not effective at preventing or detecting and correcting noncompliance with the requirements.
Effect - Incorrect award amounts could go undetected resulting in an under- or over-award of student financial assistance and/or awarding student financial assistance to students that are ineligible for such assistance.
Questioned Costs - The two errors identified within our forty-item sample resulted in an under-award of $50 for a Pell recipient and an over-award of $2,346 for a recipient of subsidized Federal Direct Loans.
Context - Two students were under- or over-awarded aid out of a sample of 40 students.
Identification as a Repeat Finding - Not Applicable.
Recommendation - The review of amounts awarded should be sufficiently detailed to detect and correct inappropriately awarded funds. A detailed review of amounts awarded and information supplied by the student should be thoroughly reviewed prior to disbursement of student financial assistance.
Views of Responsible Official - Management concurs with the finding and is providing those responsible for compliance with appropriate education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis.
Cash Management for the Institutional Portion of the COVID-19 Education Stabilization Fund
Type of Finding - Noncompliance with Cash Management compliance requirements and material weakness in internal control over compliance
Program: COVID-19 Education Stabilization Fund
Assistance Listing Number: Institutional Aid Portion 84.425F
Federal Agency: U.S. Department of Education
Criteria - 2 CFR section 200.305 requires recipients of Federal funds to minimize the time between drawing down funds from G5 and paying incurred obligations. The Certification and Agreement and/or the Supplemental Agreement published by the U.S. Department of Education pertaining to the Public and Nonprofit Institution Grant Funds identifies that funds not disbursed within three days of being drawn down may be subject to heightened scrutiny by the U.S. Department of Education, the institution’s auditors, and/or the Department’s Office of the Inspector General.
Internal controls over compliance with direct and material compliance requirements should be sufficient to prevent or detect and correct material noncompliance in a timely manner.
Condition - During testing of the cash management compliance requirements, it was noted that Sterling College was not compliant with cash management requirements. During the year ending June 30, 2023, the College drew Institutional Aid funds multiple times through the G5 system and did not disburse the funds within three calendar days of the drawdown.
The College drew $80,035 on August 26, 2022. $47,835 of the amount that was drawn was not disbursed until September 1, 2022. The College drew $20,662 on November 2, 2022 which was not disbursed until January 18, 2023.
Cause - A material weakness in internal control over compliance exists relating to cash management. Personnel responsible for maintaining compliance with cash management did not have sufficient education on the cash management requirements. In addition, there was no review over compliance with cash management requirements to monitor compliance.
Effect - The College was not compliant with Federal requirements of the COVID-19 Education Stabilization Fund.
Questioned Costs - There were no unspent funds as of June 30, 2023.
Context - During the year ended June 30, 2023, the College drew a total of $257,405 in COVID-19 Education Stabilization Funds from the G5 system. $68,497 of the amount drawn during the year ended June 30, 2023 was not disbursed timely.
Identification as a Repeat Finding - The College had similar findings for the year ended June 30, 2022 identified as findings 2022-001 and 2022-002.
Recommendation - We recommend the College provide education to those responsible for compliance with the requirements and have an individual independent of the drawdown process review drawdown requests prior to execution to ensure the drawdowns will be expended in the appropriate time frame.
Views of Responsible Official - Management concurs with the finding and is in the process of reviewing policies and procedures to comply with the requirements.
Quarterly Reporting of Emergency Financial Aid Grants to Students and Annual Reporting for COVID-19 Education Stabilization Fund
Type of Finding - Noncompliance with Reporting compliance requirements and material weakness in internal control over compliance
Program: COVID-19 Education Stabilization Fund
Assistance Listing Number: Education Stabilization Fund 84.425
Federal Agency: U.S. Department of Education
Criteria - In accordance with 86 FR 26213, institutions are required to publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than thirty days after May 13, 2021 or thirty days after the date the U.S. Department of Education first obligated funds under the Higher Education Emergency Relief Fund (HEERF) I, II, or III to the institution for emergency financial aid grants to students, whichever comes first. The report must be updated no later than ten days after the end of each calendar quarter.
The U.S. Department of Education developed the referenced HEERF data collection form to collect information regarding expenditures under sections 18004(a)(1), 18004(a)(2), and 18004(a)(3) of the CARES Act. Grantees are required to utilize the form to satisfy annual reporting requirements.
Condition - The College did not publicly post a report covering emergency financial aid grants to students within the ten day time limit for the quarters ending March 31, 2023 and June 30, 2023.
The College submitted the Higher Education Emergency Relief Fund (HEERF) data collection form (OMB No. 1840-0850) developed by the U.S. Department of Education for the period January 1, 2022 through December 31, 2022. The submitted form contained errors within the report regarding the number of non-Pell and Pell grant recipients who received a portion of the HEERF student aid and the amount of HEERF student aid portion disbursed to students.
Cause - A material weakness in internal controls over compliance exists relating to reporting. The individual responsible for reporting compliance did not have sufficient understanding of the reporting compliance requirements and there were no monitoring controls to ensure reporting was being done in accordance with the compliance requirements. Internal controls over compliance should be sufficient to ensure accurate and timely reporting with requirements.
Effect - Institutions that have not met the reporting requirements as communicated by the Department of Education may be subject to enforcement actions, up to and including being determined to be ineligible for certain other HEERF program funding.
Expenditures reported in the HEERF data collection form were incorrect resulting in inaccurate data reported to the U.S. Department of Education.
Questioned Costs - Not applicable.
Context - The institution did not publicly post two of the four required quarterly reports within the ten day requirement from quarter-end. The two reports filed untimely were filed twenty-five and twenty-six days from quarter-end.
The institution reported the information to the Department of Education timely, however, the number of HEERF student recipients that are undergraduate full-time pell grant recipients was reported incorrectly. The number of students reported on the data collection form was 187, but the College incorrectly excluded fifteen additional students and the number reported should have been 202. This caused other data points on the form to be misrepresented as well, as they were calculated using the incorrect listing of students.
Identification as a Repeat Finding - The College had a similar finding for the year ended June 30, 2022 identified as finding 2022-003. Recommendation - Provide personnel additional training on the reporting requirements under CRRSAA and ARP as communicated by the Department of Education. Refine the processes and internal controls surrounding compliance with reporting to ensure information is reported timely and accurately. This should include a review of the prepared reports and monitoring of compliance with the requirements.
We recommend the College provide education on the annual reporting requirements to personnel involved in the preparation and review of the HEERF data collection form. We also recommend management utilize the correction period communicated by the U.S. Department of Education to submit corrections for the annual report.
Views of Responsible Official - Management concurs with the findings and is in the process of reviewing policies and procedures to comply with the requirements.
Reporting of disbursement dates to the Common Origination and Disbursement system
Type of Finding - Significant deficiency in internal control over compliance
Program: Student Financial Assistance Cluster
Assistance Listing Number: Federal Pell Grants 84.063, Federal Direct Loans 84.268
Federal Agency: U.S. Department of Education
Criteria - 34 CFR 690.83 states that institutions are required to submit accurate direct loan, Pell grant, and TEACH grant disbursement records to the Common Origination and Disbursement system (COD).
Condition - Two students were found to have a disbursement date submitted to the COD system that was inconsistent with the disbursement date within the College’s records. One student’s disbursement date had a four day difference and another student’s disbursement date had a twelve day difference between the College’s records and the date submitted to the COD.
Cause - A significant deficiency in internal control over compliance exists relating to reporting of information to the COD. The College’s financial assistance software pulled the incorrect date for each of the identified students’ disbursements. This caused the incorrect date to be submitted to the COD. The internal controls to ensure accuracy and completeness was not effective at preventing or detecting and correcting these inconsistencies.
Effect - The disbursement dates were reported incorrectly and not corrected timely in the COD system.
Questioned Costs - Not Applicable.
Context - Two students out of a sample of forty were found to have the incorrect dates submitted to the COD system.
Identification as a Repeat Finding - Not Applicable.
Recommendation - We recommend the individual responsible for reconciling the information submitted to the COD system receive training on the requirements and the review of the dates being submitted be performed as a level of precision to detect and correct inconsistent reporting of disbursement information.
Views of Responsible Official - Management concurs with the finding and is providing those responsible for compliance with education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis.
Enrollment Reporting
Type of Finding - Noncompliance with Enrollment Reporting compliance requirement and material weakness in internal control over compliance
Program: Student Financial Assistance Cluster
Assistance Listing Number: Federal Pell Grants 84.063, Federal Direct Loans 84.268
Federal Agency: U.S. Department of Education
Criteria - 34 CFR 690.83(b)(2) and 34 CFR 685.309 provide regulations to institutions for the accurate and timely reporting of student enrollment information. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates to the Department of Education. The institution should have sufficient internal controls over program compliance to report information accurately and timely.
Condition - One student was found to have a status change that was not reported in accordance with the sixty-day requirements and two students were reported as less than half-time when they should have been reported as withdrawn per enrollment reporting guidelines.
Cause - The College’s system does not always report status changes correctly and the status report requires a review prior to submission. The internal controls over the review of student status changes were not effective at preventing or detecting and correcting noncompliance with the requirements.
Effect - The status changes were reported incorrectly and/or untimely to the Department of Education.
Questioned Costs - Not applicable.
Context - Out of our sample of 40 students with status changes, three students were found to have status changes reported that were not compliant with the enrollment reporting requirements.
Identification as a Repeat Finding - A similar finding was identified in the audit for the year ending June 30, 2022 as finding 2022-004.
Recommendation - The individual responsible for identifying effective status change dates needs to be educated on the requirements. The review of status changes for compliance with enrollment reporting requirements should be performed routinely and timely to verify compliance with the requirements.
Views of Responsible Official - Management concurs with the finding and is providing those responsible for compliance with appropriate education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis
Eligibility
Type of Finding - Noncompliance with Eligibility compliance requirement and material weakness in internal control over compliance
Program: Student Financial Assistance Cluster
Assistance Listing Number: Federal Pell Grants 84.063, Federal Direct Loans 84.268
Federal Agency: U.S. Department of Education
Criteria - 34 CFR 690.62 provides regulations to institutions to calculate an eligible student’s Federal Pell Grant. 34 CFR 685.200 provides regulations to institutions to determine eligibility and states that a Direct Subsidized Loan borrower must demonstrate financial need. The institution should have sufficient internal controls over compliance with direct and material compliance requirements to prevent or detect and correct material noncompliance in a timely manner.
Condition - Two errors were identified when testing the amount awarded for Federal Pell Grants and Federal Direct Loans.
One student was awarded an incorrect Federal Pell Grant amount. The student was awarded $6,845 when the student was eligible for $6,895. This resulted in an under-award of $50.
One student was awarded a subsidized Federal Direct Loan when there was no available need for a subsidized loan. The student was awarded $2,346 in subsidized loans.
Cause - A material weakness in internal control over compliance exists relating to eligibility. The internal controls over the review of awarded aid was not effective at preventing or detecting and correcting noncompliance with the requirements.
Effect - Incorrect award amounts could go undetected resulting in an under- or over-award of student financial assistance and/or awarding student financial assistance to students that are ineligible for such assistance.
Questioned Costs - The two errors identified within our forty-item sample resulted in an under-award of $50 for a Pell recipient and an over-award of $2,346 for a recipient of subsidized Federal Direct Loans.
Context - Two students were under- or over-awarded aid out of a sample of 40 students.
Identification as a Repeat Finding - Not Applicable.
Recommendation - The review of amounts awarded should be sufficiently detailed to detect and correct inappropriately awarded funds. A detailed review of amounts awarded and information supplied by the student should be thoroughly reviewed prior to disbursement of student financial assistance.
Views of Responsible Official - Management concurs with the finding and is providing those responsible for compliance with appropriate education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis.
Cash Management for the Institutional Portion of the COVID-19 Education Stabilization Fund
Type of Finding - Noncompliance with Cash Management compliance requirements and material weakness in internal control over compliance
Program: COVID-19 Education Stabilization Fund
Assistance Listing Number: Institutional Aid Portion 84.425F
Federal Agency: U.S. Department of Education
Criteria - 2 CFR section 200.305 requires recipients of Federal funds to minimize the time between drawing down funds from G5 and paying incurred obligations. The Certification and Agreement and/or the Supplemental Agreement published by the U.S. Department of Education pertaining to the Public and Nonprofit Institution Grant Funds identifies that funds not disbursed within three days of being drawn down may be subject to heightened scrutiny by the U.S. Department of Education, the institution’s auditors, and/or the Department’s Office of the Inspector General.
Internal controls over compliance with direct and material compliance requirements should be sufficient to prevent or detect and correct material noncompliance in a timely manner.
Condition - During testing of the cash management compliance requirements, it was noted that Sterling College was not compliant with cash management requirements. During the year ending June 30, 2023, the College drew Institutional Aid funds multiple times through the G5 system and did not disburse the funds within three calendar days of the drawdown.
The College drew $80,035 on August 26, 2022. $47,835 of the amount that was drawn was not disbursed until September 1, 2022. The College drew $20,662 on November 2, 2022 which was not disbursed until January 18, 2023.
Cause - A material weakness in internal control over compliance exists relating to cash management. Personnel responsible for maintaining compliance with cash management did not have sufficient education on the cash management requirements. In addition, there was no review over compliance with cash management requirements to monitor compliance.
Effect - The College was not compliant with Federal requirements of the COVID-19 Education Stabilization Fund.
Questioned Costs - There were no unspent funds as of June 30, 2023.
Context - During the year ended June 30, 2023, the College drew a total of $257,405 in COVID-19 Education Stabilization Funds from the G5 system. $68,497 of the amount drawn during the year ended June 30, 2023 was not disbursed timely.
Identification as a Repeat Finding - The College had similar findings for the year ended June 30, 2022 identified as findings 2022-001 and 2022-002.
Recommendation - We recommend the College provide education to those responsible for compliance with the requirements and have an individual independent of the drawdown process review drawdown requests prior to execution to ensure the drawdowns will be expended in the appropriate time frame.
Views of Responsible Official - Management concurs with the finding and is in the process of reviewing policies and procedures to comply with the requirements.
Quarterly Reporting of Emergency Financial Aid Grants to Students and Annual Reporting for COVID-19 Education Stabilization Fund
Type of Finding - Noncompliance with Reporting compliance requirements and material weakness in internal control over compliance
Program: COVID-19 Education Stabilization Fund
Assistance Listing Number: Education Stabilization Fund 84.425
Federal Agency: U.S. Department of Education
Criteria - In accordance with 86 FR 26213, institutions are required to publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than thirty days after May 13, 2021 or thirty days after the date the U.S. Department of Education first obligated funds under the Higher Education Emergency Relief Fund (HEERF) I, II, or III to the institution for emergency financial aid grants to students, whichever comes first. The report must be updated no later than ten days after the end of each calendar quarter.
The U.S. Department of Education developed the referenced HEERF data collection form to collect information regarding expenditures under sections 18004(a)(1), 18004(a)(2), and 18004(a)(3) of the CARES Act. Grantees are required to utilize the form to satisfy annual reporting requirements.
Condition - The College did not publicly post a report covering emergency financial aid grants to students within the ten day time limit for the quarters ending March 31, 2023 and June 30, 2023.
The College submitted the Higher Education Emergency Relief Fund (HEERF) data collection form (OMB No. 1840-0850) developed by the U.S. Department of Education for the period January 1, 2022 through December 31, 2022. The submitted form contained errors within the report regarding the number of non-Pell and Pell grant recipients who received a portion of the HEERF student aid and the amount of HEERF student aid portion disbursed to students.
Cause - A material weakness in internal controls over compliance exists relating to reporting. The individual responsible for reporting compliance did not have sufficient understanding of the reporting compliance requirements and there were no monitoring controls to ensure reporting was being done in accordance with the compliance requirements. Internal controls over compliance should be sufficient to ensure accurate and timely reporting with requirements.
Effect - Institutions that have not met the reporting requirements as communicated by the Department of Education may be subject to enforcement actions, up to and including being determined to be ineligible for certain other HEERF program funding.
Expenditures reported in the HEERF data collection form were incorrect resulting in inaccurate data reported to the U.S. Department of Education.
Questioned Costs - Not applicable.
Context - The institution did not publicly post two of the four required quarterly reports within the ten day requirement from quarter-end. The two reports filed untimely were filed twenty-five and twenty-six days from quarter-end.
The institution reported the information to the Department of Education timely, however, the number of HEERF student recipients that are undergraduate full-time pell grant recipients was reported incorrectly. The number of students reported on the data collection form was 187, but the College incorrectly excluded fifteen additional students and the number reported should have been 202. This caused other data points on the form to be misrepresented as well, as they were calculated using the incorrect listing of students.
Identification as a Repeat Finding - The College had a similar finding for the year ended June 30, 2022 identified as finding 2022-003. Recommendation - Provide personnel additional training on the reporting requirements under CRRSAA and ARP as communicated by the Department of Education. Refine the processes and internal controls surrounding compliance with reporting to ensure information is reported timely and accurately. This should include a review of the prepared reports and monitoring of compliance with the requirements.
We recommend the College provide education on the annual reporting requirements to personnel involved in the preparation and review of the HEERF data collection form. We also recommend management utilize the correction period communicated by the U.S. Department of Education to submit corrections for the annual report.
Views of Responsible Official - Management concurs with the findings and is in the process of reviewing policies and procedures to comply with the requirements.
Reporting of disbursement dates to the Common Origination and Disbursement system
Type of Finding - Significant deficiency in internal control over compliance
Program: Student Financial Assistance Cluster
Assistance Listing Number: Federal Pell Grants 84.063, Federal Direct Loans 84.268
Federal Agency: U.S. Department of Education
Criteria - 34 CFR 690.83 states that institutions are required to submit accurate direct loan, Pell grant, and TEACH grant disbursement records to the Common Origination and Disbursement system (COD).
Condition - Two students were found to have a disbursement date submitted to the COD system that was inconsistent with the disbursement date within the College’s records. One student’s disbursement date had a four day difference and another student’s disbursement date had a twelve day difference between the College’s records and the date submitted to the COD.
Cause - A significant deficiency in internal control over compliance exists relating to reporting of information to the COD. The College’s financial assistance software pulled the incorrect date for each of the identified students’ disbursements. This caused the incorrect date to be submitted to the COD. The internal controls to ensure accuracy and completeness was not effective at preventing or detecting and correcting these inconsistencies.
Effect - The disbursement dates were reported incorrectly and not corrected timely in the COD system.
Questioned Costs - Not Applicable.
Context - Two students out of a sample of forty were found to have the incorrect dates submitted to the COD system.
Identification as a Repeat Finding - Not Applicable.
Recommendation - We recommend the individual responsible for reconciling the information submitted to the COD system receive training on the requirements and the review of the dates being submitted be performed as a level of precision to detect and correct inconsistent reporting of disbursement information.
Views of Responsible Official - Management concurs with the finding and is providing those responsible for compliance with education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis.