Material Weakness: Identification of the Federal Program: Federal Assistance Listing Number 93.498 US Department of Health and Human Services COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for, and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. The Health Resources and Services Administration (HRSA) provided guidance on how an organization was to report usage of PRF distributions received. Period 1 and Period 2 reporting required an organization to illustrate how PRF funds received were used. An organization was allowed to include lost revenue attributable to coronavirus from January 1, 2020 through December 31, 2021 depending on the period reporting. Condition: During the process of identifying lost revenues attributable to coronavirus, management reported all lost revenue as Medicaid. However, support provided by management indicated that lost revenue was also identified for self-pay revenue and other payors. Cause: Mosaic?s internal control policy did not ensure that eligible lost revenue followed applicable reporting guidance. Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently failed to report lost revenue by payer. Effect: Management failed to disaggregate by payer amounts in the PRF reporting portal for lost revenue. Questioned Costs: None reported. Context: Key line items were tested on the Period 2 HHS report. Recommendation: We recommend that management enhance its existing internal control processes to ensure the lost revenue reporting meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the noted finding. Management will continue to refine its processes to more diligently review the lost revenue reporting key lines to ensure such amounts are in accordance with the terms and conditions of the federal award.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
Finding 2022-006: Significant Deficiency ? Control Environment Program: Student Financial Assistance Cluster and Higher Education Emergency Relief Funds Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition/Context: It was noted during the audit, that there were gaps in the internal control structure of the College, that was no longer adequate to ensure compliance with federal regulations and compliance requirements. Cause: During the audit, it was noted that there was significant turnover in key positions responsible for administering the federal awards programs. Effect: The College had several compliance and controls findings reported for the year ended June 30, 2022. Questioned costs: Not determinable Recommendation: The College should review all process, policies and procedures around federal awards programs to ensure adequate staffing, staff experience and continuing education and a system of internal controls are in place in order to comply with federal regulations and compliance requirements. Management?s Response: The staffing changes in the Business Office and the Financial Aid office resulted in learning curves for the new employees. Both offices have started projects to document procedures so that when turnover occurs, there is a blueprint in place to assist the new employees. SMC will also review the internal controls in place for federal reporting to determine how they can be strengthened.
FINDING 2022-001 Subject: Student Financial Assistance Cluster - Special Tests and Provisions - Return of Title IV Funds Federal Agency: Department of Education Federal Programs: Federal Supplemental Educational Opportunity Grants, Federal Pell Grant, Federal Direct Student Loans Assistance Listings Numbers: 84.007, 84.063, 84.268 Federal Award Number and Year (or Other Identifying Number): FY 2022 Compliance Requirement: Special Tests and Provisions - Return of Title IV Funds Audit Findings: Material Weakness, Other Matters Condition and Context The College had not designed, nor implemented an effective internal control system to ensure compliance with requirements related to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. For 2 of 25 (8 percent) return of Title IV funds tested, the amount returned to the Department of Education was incorrect. The College completed an initial return of Title IV funds and properly posted the full amount of aid to be returned to the students' accounts. During an internal review, the College discovered an error in the initial calculation and therefore calculated a new return of Title IV funds. When the subsequent calculation was performed, the College once again posted the total amount of aid to be returned to each student's account. As a result, the College incorrectly returned too much in Title IV funds to the Department of Education in the amounts of $113 and $546 for the first and second errors, respectively. In addition, this caused both students' accounts to reflect a balance due to the College that should not have been owed. The lack of internal controls and noncompliance were systemic issues throughout the audit period; however, these were isolated to students for which a corrective calculation for return of Title IV funds was performed. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 34 CFR 668.22(g) states in part: "Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of ? (i) (ii) Cause The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section. . . ." Management had not developed a system of internal control that would have ensured procedures were in place in order to comply with the provisions of federal statutes, regulations, and the terms and conditions of the federal award in relation to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. The College should have considered the original amount of aid to be returned that had already been posted to each student's account. The College should have posted the additional amount of aid to be returned to the students' accounts based upon the net difference between the original calculation and the corrective calculation performed for each student. Effect The failure to design and implement an effective internal control system enabled material noncompliance to remain undetected. As a result, the College returned too much in Title IV funds to the Department of Education as outlined in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the College's management design and implement a system of internal control related to procedures for calculating the return of Title IV funds to ensure appropriate amounts are returned to the Department of Education and are posted to students' accounts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response It is the College's responsibility to administer its student financial assistance programs in a manner that both complies with applicable federal regulations and guidelines as well as ensures that, when necessary, the appropriate amount of unearned financial assistance is returned to the Title IV programs. 34 CFR 668.22(g) states in part: "Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of ? (i) (ii) Cause The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section. . . ." Management had not developed a system of internal control that would have ensured procedures were in place in order to comply with the provisions of federal statutes, regulations, and the terms and conditions of the federal award in relation to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. The College should have considered the original amount of aid to be returned that had already been posted to each student's account. The College should have posted the additional amount of aid to be returned to the students' accounts based upon the net difference between the original calculation and the corrective calculation performed for each student. Effect The failure to design and implement an effective internal control system enabled material noncompliance to remain undetected. As a result, the College returned too much in Title IV funds to the Department of Education as outlined in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the College's management design and implement a system of internal control related to procedures for calculating the return of Title IV funds to ensure appropriate amounts are returned to the Department of Education and are posted to students' accounts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response It is the College's responsibility to administer its student financial assistance programs in a manner that both complies with applicable federal regulations and guidelines as well as ensures that, when necessary, the appropriate amount of unearned financial assistance is returned to the Title IV programs.
FINDING 2022-001 Subject: Student Financial Assistance Cluster - Special Tests and Provisions - Return of Title IV Funds Federal Agency: Department of Education Federal Programs: Federal Supplemental Educational Opportunity Grants, Federal Pell Grant, Federal Direct Student Loans Assistance Listings Numbers: 84.007, 84.063, 84.268 Federal Award Number and Year (or Other Identifying Number): FY 2022 Compliance Requirement: Special Tests and Provisions - Return of Title IV Funds Audit Findings: Material Weakness, Other Matters Condition and Context The College had not designed, nor implemented an effective internal control system to ensure compliance with requirements related to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. For 2 of 25 (8 percent) return of Title IV funds tested, the amount returned to the Department of Education was incorrect. The College completed an initial return of Title IV funds and properly posted the full amount of aid to be returned to the students' accounts. During an internal review, the College discovered an error in the initial calculation and therefore calculated a new return of Title IV funds. When the subsequent calculation was performed, the College once again posted the total amount of aid to be returned to each student's account. As a result, the College incorrectly returned too much in Title IV funds to the Department of Education in the amounts of $113 and $546 for the first and second errors, respectively. In addition, this caused both students' accounts to reflect a balance due to the College that should not have been owed. The lack of internal controls and noncompliance were systemic issues throughout the audit period; however, these were isolated to students for which a corrective calculation for return of Title IV funds was performed. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 34 CFR 668.22(g) states in part: "Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of ? (i) (ii) Cause The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section. . . ." Management had not developed a system of internal control that would have ensured procedures were in place in order to comply with the provisions of federal statutes, regulations, and the terms and conditions of the federal award in relation to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. The College should have considered the original amount of aid to be returned that had already been posted to each student's account. The College should have posted the additional amount of aid to be returned to the students' accounts based upon the net difference between the original calculation and the corrective calculation performed for each student. Effect The failure to design and implement an effective internal control system enabled material noncompliance to remain undetected. As a result, the College returned too much in Title IV funds to the Department of Education as outlined in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the College's management design and implement a system of internal control related to procedures for calculating the return of Title IV funds to ensure appropriate amounts are returned to the Department of Education and are posted to students' accounts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response It is the College's responsibility to administer its student financial assistance programs in a manner that both complies with applicable federal regulations and guidelines as well as ensures that, when necessary, the appropriate amount of unearned financial assistance is returned to the Title IV programs. 34 CFR 668.22(g) states in part: "Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of ? (i) (ii) Cause The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section. . . ." Management had not developed a system of internal control that would have ensured procedures were in place in order to comply with the provisions of federal statutes, regulations, and the terms and conditions of the federal award in relation to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. The College should have considered the original amount of aid to be returned that had already been posted to each student's account. The College should have posted the additional amount of aid to be returned to the students' accounts based upon the net difference between the original calculation and the corrective calculation performed for each student. Effect The failure to design and implement an effective internal control system enabled material noncompliance to remain undetected. As a result, the College returned too much in Title IV funds to the Department of Education as outlined in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the College's management design and implement a system of internal control related to procedures for calculating the return of Title IV funds to ensure appropriate amounts are returned to the Department of Education and are posted to students' accounts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response It is the College's responsibility to administer its student financial assistance programs in a manner that both complies with applicable federal regulations and guidelines as well as ensures that, when necessary, the appropriate amount of unearned financial assistance is returned to the Title IV programs.
FINDING 2022-001 Subject: Student Financial Assistance Cluster - Special Tests and Provisions - Return of Title IV Funds Federal Agency: Department of Education Federal Programs: Federal Supplemental Educational Opportunity Grants, Federal Pell Grant, Federal Direct Student Loans Assistance Listings Numbers: 84.007, 84.063, 84.268 Federal Award Number and Year (or Other Identifying Number): FY 2022 Compliance Requirement: Special Tests and Provisions - Return of Title IV Funds Audit Findings: Material Weakness, Other Matters Condition and Context The College had not designed, nor implemented an effective internal control system to ensure compliance with requirements related to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. For 2 of 25 (8 percent) return of Title IV funds tested, the amount returned to the Department of Education was incorrect. The College completed an initial return of Title IV funds and properly posted the full amount of aid to be returned to the students' accounts. During an internal review, the College discovered an error in the initial calculation and therefore calculated a new return of Title IV funds. When the subsequent calculation was performed, the College once again posted the total amount of aid to be returned to each student's account. As a result, the College incorrectly returned too much in Title IV funds to the Department of Education in the amounts of $113 and $546 for the first and second errors, respectively. In addition, this caused both students' accounts to reflect a balance due to the College that should not have been owed. The lack of internal controls and noncompliance were systemic issues throughout the audit period; however, these were isolated to students for which a corrective calculation for return of Title IV funds was performed. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 34 CFR 668.22(g) states in part: "Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of ? (i) (ii) Cause The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section. . . ." Management had not developed a system of internal control that would have ensured procedures were in place in order to comply with the provisions of federal statutes, regulations, and the terms and conditions of the federal award in relation to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. The College should have considered the original amount of aid to be returned that had already been posted to each student's account. The College should have posted the additional amount of aid to be returned to the students' accounts based upon the net difference between the original calculation and the corrective calculation performed for each student. Effect The failure to design and implement an effective internal control system enabled material noncompliance to remain undetected. As a result, the College returned too much in Title IV funds to the Department of Education as outlined in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the College's management design and implement a system of internal control related to procedures for calculating the return of Title IV funds to ensure appropriate amounts are returned to the Department of Education and are posted to students' accounts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response It is the College's responsibility to administer its student financial assistance programs in a manner that both complies with applicable federal regulations and guidelines as well as ensures that, when necessary, the appropriate amount of unearned financial assistance is returned to the Title IV programs. 34 CFR 668.22(g) states in part: "Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of ? (i) (ii) Cause The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section. . . ." Management had not developed a system of internal control that would have ensured procedures were in place in order to comply with the provisions of federal statutes, regulations, and the terms and conditions of the federal award in relation to the Special Tests and Provisions - Return of Title IV Funds compliance requirement. The College should have considered the original amount of aid to be returned that had already been posted to each student's account. The College should have posted the additional amount of aid to be returned to the students' accounts based upon the net difference between the original calculation and the corrective calculation performed for each student. Effect The failure to design and implement an effective internal control system enabled material noncompliance to remain undetected. As a result, the College returned too much in Title IV funds to the Department of Education as outlined in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the College's management design and implement a system of internal control related to procedures for calculating the return of Title IV funds to ensure appropriate amounts are returned to the Department of Education and are posted to students' accounts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response It is the College's responsibility to administer its student financial assistance programs in a manner that both complies with applicable federal regulations and guidelines as well as ensures that, when necessary, the appropriate amount of unearned financial assistance is returned to the Title IV programs.
Financial Policies and Procedures Update (Significant Deficiency in Internal Control over Federal Major Program) Criteria: 2 CFR Section 200.303 requires federal award recipients to establish and maintain effective internal controls over those awards. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO). Condition: During the year under audit, the Organization did not implement a financial policies and procedures manual that complied with Uniform Guidance documentation requirements under 2 CFR 200.303. Cause: The Organization has not created a financial policies and procedures manual to comply with the Uniform Guidance requirements under 2 CFR 300 and 2 CFR 400. Effect: Failure to update internal controls to comply with the requirements of the Uniform Guidance could result in ineffective monitoring of costs allocated to the federal program. Auditor?s Recommendation: The Organization should strengthen its internal control practices by formalizing its policies and procedures to comply with the Uniform Guidance.
Identifying Number: 2022-001 Information of the Federal Program: Federal Assistance Listing #93.498, Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Criteria or Specific Requirement: Uniform Guidance in 2 CFR 200.303 requires the Organization to establish and maintain internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in accordance with the terms and conditions of the grant. The Post-Payment Notice of Reporting Requirement dated June 11, 2021, requires that nursing home infection control distributions may only be used for infection control expenses, and the infection control expenses be reported in the HRSA PRF Reporting Portal. Condition: The Organization does not have adequate internal controls in place to provide reasonable assurance that the input of infection control expenses reported in the HRSA Reporting Portal was reviewed and approved for allowability, accuracy and completeness in compliance with the terms and conditions of the PRF. Cause: The review process of the amounts submitted in the HRSA PRF Reporting Portal was not consistently documented, and therefore, controls are not operating effectively. Questioned Costs: None Context: There was no documented review of the HRSA PRF Reporting Portal submissions for Periods 2 and 3 for the infection control expenses. Repeat Finding: No Recommendation: A formal process should be implemented and placed in service to ensure the review process of the infection control expenses submitted into the HRSA PRF Reporting Portal is documented. Views of Responsible Officials: See Corrective Action Plan.
2022 ? 002 Federal agency: U.S. Department of Treasury Federal program title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: The County did not have an internal control process in place to review the indirect cost allocation to the program to ensure it was allowable in accordance with Uniform Guidance. Criteria or Specific Requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-federal entity must 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. Questioned Costs: None Effect: With no internal controls an overallocation of indirect costs may occur causing noncompliance related to allowable costs. Context: As payroll costs were charged to the program for a member of management the overhead rate applied to management employees was also charged, however, the County did not have documentation that proper internal controls were in place to review indirect costs allocated to the program in accordance with Uniform Guidance. Cause: The County did not establish observable internal controls over the indirect cost allocation. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that that County establish an internal control process for reviewing and approving indirect costs allocated in accordance with Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and recommendation.
2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.007; 84.033; 84.038; 84.063; 84.268; 84.379; 93.925 Program Names: Student Financial Assistance Cluster - Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Scholarships for Health Professions Students from Disadvantaged Background Program Expenditures: $359,412; $432,302; $1,264,604; $4,213,853; $20,166,174; $26,878; $860,306 Award Numbers: P007A221121; P033A221121; P063P211351; P268K221351; P379T221351 Questioned Costs: None The Chicago State University (University) did not perform risk assessment procedures and document safeguards for each risk identified in relation to student financial aid information. According to the University?s Program Participation Agreement with the Department of Education, the University is required to protect student financial aid information. During our testing, we noted the University had not conducted a risk assessment identifying internal and external risks to the security, confidentiality, and integrity of student information. The Standards for Safeguarding Customer Information, required by the Gramm-Leach-Bliley Act (GLBA) (16 CFR ? 314.4 (b)), require the University to identify reasonable foreseeable internal and external risks to the security, confidentiality, and integrity of student information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risk in each relevant area of operations, including: 2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security (Continued) (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other system failures. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. In addition, the Framework for Improving Critical Infrastructure Cybersecurity published by the National Institute of Standards and Technology (NIST) requires entities to perform a risk assessment and establish a risk mitigation plan to minimize identified risks. University management indicated the issues were due to the vacancy of an Information Technology Security Officer position. Without a risk assessment, the University is at risk of noncompliance with the GLBA. In addition, the University?s systems and information could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. (Finding Code No. 2022-004) RECOMMENDATION We recommend the University strengthen controls to ensure adequate risk assessment procedures are performed and documentation of safeguards for each risk identified in relation to student information security is maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.007; 84.033; 84.038; 84.063; 84.268; 84.379; 93.925 Program Names: Student Financial Assistance Cluster - Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Scholarships for Health Professions Students from Disadvantaged Background Program Expenditures: $359,412; $432,302; $1,264,604; $4,213,853; $20,166,174; $26,878; $860,306 Award Numbers: P007A221121; P033A221121; P063P211351; P268K221351; P379T221351 Questioned Costs: None The Chicago State University (University) did not perform risk assessment procedures and document safeguards for each risk identified in relation to student financial aid information. According to the University?s Program Participation Agreement with the Department of Education, the University is required to protect student financial aid information. During our testing, we noted the University had not conducted a risk assessment identifying internal and external risks to the security, confidentiality, and integrity of student information. The Standards for Safeguarding Customer Information, required by the Gramm-Leach-Bliley Act (GLBA) (16 CFR ? 314.4 (b)), require the University to identify reasonable foreseeable internal and external risks to the security, confidentiality, and integrity of student information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risk in each relevant area of operations, including: 2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security (Continued) (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other system failures. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. In addition, the Framework for Improving Critical Infrastructure Cybersecurity published by the National Institute of Standards and Technology (NIST) requires entities to perform a risk assessment and establish a risk mitigation plan to minimize identified risks. University management indicated the issues were due to the vacancy of an Information Technology Security Officer position. Without a risk assessment, the University is at risk of noncompliance with the GLBA. In addition, the University?s systems and information could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. (Finding Code No. 2022-004) RECOMMENDATION We recommend the University strengthen controls to ensure adequate risk assessment procedures are performed and documentation of safeguards for each risk identified in relation to student information security is maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.007; 84.033; 84.038; 84.063; 84.268; 84.379; 93.925 Program Names: Student Financial Assistance Cluster - Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Scholarships for Health Professions Students from Disadvantaged Background Program Expenditures: $359,412; $432,302; $1,264,604; $4,213,853; $20,166,174; $26,878; $860,306 Award Numbers: P007A221121; P033A221121; P063P211351; P268K221351; P379T221351 Questioned Costs: None The Chicago State University (University) did not perform risk assessment procedures and document safeguards for each risk identified in relation to student financial aid information. According to the University?s Program Participation Agreement with the Department of Education, the University is required to protect student financial aid information. During our testing, we noted the University had not conducted a risk assessment identifying internal and external risks to the security, confidentiality, and integrity of student information. The Standards for Safeguarding Customer Information, required by the Gramm-Leach-Bliley Act (GLBA) (16 CFR ? 314.4 (b)), require the University to identify reasonable foreseeable internal and external risks to the security, confidentiality, and integrity of student information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risk in each relevant area of operations, including: 2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security (Continued) (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other system failures. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. In addition, the Framework for Improving Critical Infrastructure Cybersecurity published by the National Institute of Standards and Technology (NIST) requires entities to perform a risk assessment and establish a risk mitigation plan to minimize identified risks. University management indicated the issues were due to the vacancy of an Information Technology Security Officer position. Without a risk assessment, the University is at risk of noncompliance with the GLBA. In addition, the University?s systems and information could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. (Finding Code No. 2022-004) RECOMMENDATION We recommend the University strengthen controls to ensure adequate risk assessment procedures are performed and documentation of safeguards for each risk identified in relation to student information security is maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.007; 84.033; 84.038; 84.063; 84.268; 84.379; 93.925 Program Names: Student Financial Assistance Cluster - Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Scholarships for Health Professions Students from Disadvantaged Background Program Expenditures: $359,412; $432,302; $1,264,604; $4,213,853; $20,166,174; $26,878; $860,306 Award Numbers: P007A221121; P033A221121; P063P211351; P268K221351; P379T221351 Questioned Costs: None The Chicago State University (University) did not perform risk assessment procedures and document safeguards for each risk identified in relation to student financial aid information. According to the University?s Program Participation Agreement with the Department of Education, the University is required to protect student financial aid information. During our testing, we noted the University had not conducted a risk assessment identifying internal and external risks to the security, confidentiality, and integrity of student information. The Standards for Safeguarding Customer Information, required by the Gramm-Leach-Bliley Act (GLBA) (16 CFR ? 314.4 (b)), require the University to identify reasonable foreseeable internal and external risks to the security, confidentiality, and integrity of student information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risk in each relevant area of operations, including: 2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security (Continued) (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other system failures. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. In addition, the Framework for Improving Critical Infrastructure Cybersecurity published by the National Institute of Standards and Technology (NIST) requires entities to perform a risk assessment and establish a risk mitigation plan to minimize identified risks. University management indicated the issues were due to the vacancy of an Information Technology Security Officer position. Without a risk assessment, the University is at risk of noncompliance with the GLBA. In addition, the University?s systems and information could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. (Finding Code No. 2022-004) RECOMMENDATION We recommend the University strengthen controls to ensure adequate risk assessment procedures are performed and documentation of safeguards for each risk identified in relation to student information security is maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-003. FINDING Failure to Obtain Student Verification Documents Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.063; 84.268 Program Names: Student Financial Assistance Cluster - Federal Pell Grant Program Federal Direct Student Loans Program Expenditures: $4,213,853; $20,166,174 Award Numbers: P063P211351; P268K221351 Questioned Costs: None The Chicago State University (University) did not obtain and review student verification documents. For Academic Year 2021-2022, the Department of Education waived the verification of most Free Application for Federal Student Aid (FAFSA) information, except for Identity/Statement of Educational Purpose and High School Completion Status. During testing of 25 students selected for verification, we noted the University did not obtain supporting documentation to verify the identity of two (8%) students. The sample methods used in performing this testing were not statistically valid. The Federal Student Aid Publication (GEN-21-05) ? Changes to 2021-2022 Verification Requirements, dated July 13, 2021, waived verification of information of students applying for financial assistance except for verification of documents for Identity/Statement of Educational Purpose and High School Completion Status of certain verification groups. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. University management indicated the failure to obtain verification documents was due to oversight. Failure to obtain verification documents in accordance with federal regulations may result in students receiving awards for which they are ineligible and the University incurring unallowable costs. (Finding Code No. 2022-003) 2022-003. FINDING Failure to Obtain Student Verification Documents (Continued) RECOMMENDATION We recommend the University ensure student verification documents are obtained, reviewed, and maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-003. FINDING Failure to Obtain Student Verification Documents Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.063; 84.268 Program Names: Student Financial Assistance Cluster - Federal Pell Grant Program Federal Direct Student Loans Program Expenditures: $4,213,853; $20,166,174 Award Numbers: P063P211351; P268K221351 Questioned Costs: None The Chicago State University (University) did not obtain and review student verification documents. For Academic Year 2021-2022, the Department of Education waived the verification of most Free Application for Federal Student Aid (FAFSA) information, except for Identity/Statement of Educational Purpose and High School Completion Status. During testing of 25 students selected for verification, we noted the University did not obtain supporting documentation to verify the identity of two (8%) students. The sample methods used in performing this testing were not statistically valid. The Federal Student Aid Publication (GEN-21-05) ? Changes to 2021-2022 Verification Requirements, dated July 13, 2021, waived verification of information of students applying for financial assistance except for verification of documents for Identity/Statement of Educational Purpose and High School Completion Status of certain verification groups. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. University management indicated the failure to obtain verification documents was due to oversight. Failure to obtain verification documents in accordance with federal regulations may result in students receiving awards for which they are ineligible and the University incurring unallowable costs. (Finding Code No. 2022-003) 2022-003. FINDING Failure to Obtain Student Verification Documents (Continued) RECOMMENDATION We recommend the University ensure student verification documents are obtained, reviewed, and maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.007; 84.033; 84.038; 84.063; 84.268; 84.379; 93.925 Program Names: Student Financial Assistance Cluster - Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Scholarships for Health Professions Students from Disadvantaged Background Program Expenditures: $359,412; $432,302; $1,264,604; $4,213,853; $20,166,174; $26,878; $860,306 Award Numbers: P007A221121; P033A221121; P063P211351; P268K221351; P379T221351 Questioned Costs: None The Chicago State University (University) did not perform risk assessment procedures and document safeguards for each risk identified in relation to student financial aid information. According to the University?s Program Participation Agreement with the Department of Education, the University is required to protect student financial aid information. During our testing, we noted the University had not conducted a risk assessment identifying internal and external risks to the security, confidentiality, and integrity of student information. The Standards for Safeguarding Customer Information, required by the Gramm-Leach-Bliley Act (GLBA) (16 CFR ? 314.4 (b)), require the University to identify reasonable foreseeable internal and external risks to the security, confidentiality, and integrity of student information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risk in each relevant area of operations, including: 2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security (Continued) (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other system failures. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. In addition, the Framework for Improving Critical Infrastructure Cybersecurity published by the National Institute of Standards and Technology (NIST) requires entities to perform a risk assessment and establish a risk mitigation plan to minimize identified risks. University management indicated the issues were due to the vacancy of an Information Technology Security Officer position. Without a risk assessment, the University is at risk of noncompliance with the GLBA. In addition, the University?s systems and information could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. (Finding Code No. 2022-004) RECOMMENDATION We recommend the University strengthen controls to ensure adequate risk assessment procedures are performed and documentation of safeguards for each risk identified in relation to student information security is maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-005. FINDING Failure to Notify Students Upon Disbursement of Funds Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.268; 84.379 Program Names: Student Financial Assistance Cluster - Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Program Expenditures: $20,166,174; $26,878 Award Number: P268K221351 Questioned Costs: None The Chicago State University (University) did not notify the students upon disbursement of grant funds and loans. During testing of nine students, who received Teacher Education Assistance for College and Higher Education Grants (TEACH) totaling $21,220, we noted six (67%) students with grant disbursements totaling $16,505 were not notified by the University indicating the funds were credited to the students? accounts. The sample methods used in performing this testing were not statistically valid. In addition, during testing of 25 students, who received Federal Direct Student Loans totaling $447,363, we noted 25 (100%) students were not notified by the University indicating the funds were credited to the students? accounts. The sample methods used in performing this testing were not statistically valid. The Code of Federal Regulations (Code) (34 CFR ? 668.165 (a)(3)(i)) requires the University to notify students or parents in writing no earlier than 30 days before, and no later than 30 days after, crediting the students? ledger account at the University with TEACH Grant funds or Federal Direct Student Loans. Further, the Code (2 CFR ? 200.303) requires the nonfederal entity receiving federal awards to establish and maintain effective internal control over the federal award to provide reasonable assurance the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure timely notification of disbursements to students receiving TEACH Grants and Federal Direct Loans. University management indicated the failure to timely notify students upon disbursements of TEACH grants and Direct Loans was due to resource constraints. 2022-005. FINDING Failure to Notify Students Upon Disbursement (Continued) Failure to timely notify students upon disbursement of funds resulted in noncompliance with the Code. (Finding Code No. 2022-005) RECOMMENDATION We recommend the University strengthen controls to ensure timely notification is sent to students upon disbursement of grant funds and loans. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-005. FINDING Failure to Notify Students Upon Disbursement of Funds Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.268; 84.379 Program Names: Student Financial Assistance Cluster - Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Program Expenditures: $20,166,174; $26,878 Award Number: P268K221351 Questioned Costs: None The Chicago State University (University) did not notify the students upon disbursement of grant funds and loans. During testing of nine students, who received Teacher Education Assistance for College and Higher Education Grants (TEACH) totaling $21,220, we noted six (67%) students with grant disbursements totaling $16,505 were not notified by the University indicating the funds were credited to the students? accounts. The sample methods used in performing this testing were not statistically valid. In addition, during testing of 25 students, who received Federal Direct Student Loans totaling $447,363, we noted 25 (100%) students were not notified by the University indicating the funds were credited to the students? accounts. The sample methods used in performing this testing were not statistically valid. The Code of Federal Regulations (Code) (34 CFR ? 668.165 (a)(3)(i)) requires the University to notify students or parents in writing no earlier than 30 days before, and no later than 30 days after, crediting the students? ledger account at the University with TEACH Grant funds or Federal Direct Student Loans. Further, the Code (2 CFR ? 200.303) requires the nonfederal entity receiving federal awards to establish and maintain effective internal control over the federal award to provide reasonable assurance the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure timely notification of disbursements to students receiving TEACH Grants and Federal Direct Loans. University management indicated the failure to timely notify students upon disbursements of TEACH grants and Direct Loans was due to resource constraints. 2022-005. FINDING Failure to Notify Students Upon Disbursement (Continued) Failure to timely notify students upon disbursement of funds resulted in noncompliance with the Code. (Finding Code No. 2022-005) RECOMMENDATION We recommend the University strengthen controls to ensure timely notification is sent to students upon disbursement of grant funds and loans. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.007; 84.033; 84.038; 84.063; 84.268; 84.379; 93.925 Program Names: Student Financial Assistance Cluster - Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Scholarships for Health Professions Students from Disadvantaged Background Program Expenditures: $359,412; $432,302; $1,264,604; $4,213,853; $20,166,174; $26,878; $860,306 Award Numbers: P007A221121; P033A221121; P063P211351; P268K221351; P379T221351 Questioned Costs: None The Chicago State University (University) did not perform risk assessment procedures and document safeguards for each risk identified in relation to student financial aid information. According to the University?s Program Participation Agreement with the Department of Education, the University is required to protect student financial aid information. During our testing, we noted the University had not conducted a risk assessment identifying internal and external risks to the security, confidentiality, and integrity of student information. The Standards for Safeguarding Customer Information, required by the Gramm-Leach-Bliley Act (GLBA) (16 CFR ? 314.4 (b)), require the University to identify reasonable foreseeable internal and external risks to the security, confidentiality, and integrity of student information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risk in each relevant area of operations, including: 2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security (Continued) (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other system failures. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. In addition, the Framework for Improving Critical Infrastructure Cybersecurity published by the National Institute of Standards and Technology (NIST) requires entities to perform a risk assessment and establish a risk mitigation plan to minimize identified risks. University management indicated the issues were due to the vacancy of an Information Technology Security Officer position. Without a risk assessment, the University is at risk of noncompliance with the GLBA. In addition, the University?s systems and information could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. (Finding Code No. 2022-004) RECOMMENDATION We recommend the University strengthen controls to ensure adequate risk assessment procedures are performed and documentation of safeguards for each risk identified in relation to student information security is maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.007; 84.033; 84.038; 84.063; 84.268; 84.379; 93.925 Program Names: Student Financial Assistance Cluster - Federal Supplemental Educational Opportunity Grants Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Scholarships for Health Professions Students from Disadvantaged Background Program Expenditures: $359,412; $432,302; $1,264,604; $4,213,853; $20,166,174; $26,878; $860,306 Award Numbers: P007A221121; P033A221121; P063P211351; P268K221351; P379T221351 Questioned Costs: None The Chicago State University (University) did not perform risk assessment procedures and document safeguards for each risk identified in relation to student financial aid information. According to the University?s Program Participation Agreement with the Department of Education, the University is required to protect student financial aid information. During our testing, we noted the University had not conducted a risk assessment identifying internal and external risks to the security, confidentiality, and integrity of student information. The Standards for Safeguarding Customer Information, required by the Gramm-Leach-Bliley Act (GLBA) (16 CFR ? 314.4 (b)), require the University to identify reasonable foreseeable internal and external risks to the security, confidentiality, and integrity of student information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risk in each relevant area of operations, including: 2022-004. FINDING Noncompliance with Special Tests and Provisions ? Student Financial Aid Information Security (Continued) (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other system failures. Additionally, the Uniform Guidance (2 CFR ? 200.303) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. In addition, the Framework for Improving Critical Infrastructure Cybersecurity published by the National Institute of Standards and Technology (NIST) requires entities to perform a risk assessment and establish a risk mitigation plan to minimize identified risks. University management indicated the issues were due to the vacancy of an Information Technology Security Officer position. Without a risk assessment, the University is at risk of noncompliance with the GLBA. In addition, the University?s systems and information could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. (Finding Code No. 2022-004) RECOMMENDATION We recommend the University strengthen controls to ensure adequate risk assessment procedures are performed and documentation of safeguards for each risk identified in relation to student information security is maintained. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.
2022-006. FINDING Lack of Adherence to Controls and Noncompliance with Requirement Applicable to the Education Stabilization Fund Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.425E; 84.425F; 84.425L Program Names: Higher Education Stabilization Fund - COVID-19 - Higher Education Emergency Relief Fund - Student Aid Portion COVID-19 - Higher Education Emergency Relief Fund - Institutional Portion COVID-19 - Higher Education Emergency Relief Fund - Minority Serving Institutions Program Expenditures: $4,008,386; $3,338,668; $436,450 Award Numbers: 425E201661; P425F201393; P425L200359 Questioned Costs: None The Chicago State University (University) did not utilize the updated quarterly reporting form to report its Higher Education Emergency Relief Fund (HEERF) student and institutional aid awards. During testing, we noted one of four (25%) quarterly reporting forms utilized for reporting HEERF awards was outdated. As such, the information reported by the University did not include certain data required by the Department of Education. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted into Public Law 116-136. Section 18004(a)(1) of the CARES Act established the HEERF I program which authorizes the Secretary of Education (Secretary) to allocate funding to eligible institutions of higher education to prevent, prepare for, and respond to the coronavirus pandemic (COVID-19). Subsequently, additional grants from the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) and the American Rescue Plan Act of 2021 (ARP) were received, establishing the HEERF II and HEERF III programs, respectively, to continuously support public and non-profit institutions and students. Under the CARES, CRRSSA, and ARP Acts, an institution is required to complete and post on its website a quarterly and annual report of its HEERF grant expenditures using the form designed by the Department of Education to help ensure funding transparency and public accountability. 2022-006. FINDING Lack of Adherence to Controls and Noncompliance with Requirement Applicable to the Education Stabilization Fund (Continued) The Higher Education Emergency Relief Fund III Frequently Asked Questions, Question 36, published by the Department of Education, requires the University to utilize the new quarterly reporting form beginning June 30, 2022, reporting period. The new quarterly reporting form includes new reporting categories on mental health spending, HEERF (a)(2) construction flexibilities, and lost revenue and combines the separate institutional and student reporting requirement. The Code of Federal Regulations (Code) (2 CFR ? 200.303) requires the University to establish and maintain effective internal control over the federal award to provide reasonable assurance the University 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 compliance with grant reporting requirements. This finding was first reported in Fiscal Year 2020. In subsequent years, the University has been unsuccessful in implementing appropriate procedures to improve its controls over HEERF awards. University management indicated the failure to use the correct reporting form was due to lack of coordination between staff involved in the reporting process. Failure to comply with the grant reporting requirements of the HEERF programs results in noncompliance with the CARES, CRRSAA, and ARP Acts, grant agreements, and the Code. (Finding Code No. 2022-006, 2021-004, 2020-005) RECOMMENDATION We recommend the University strengthen its controls to ensure updated forms are used to report its HEERF student and institutional aid awards. UNIVERSITY RESPONSE The University agrees with the finding and has implemented a corrective action plan to improve internal controls related to posting of HEERF reports and submission of the Governor's Emergency Education Relief Fund reports.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria - 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes and conditions of the award. Condition - During our testing, it was noted that one of the loan reserve accounts was underfunded by approximately $45,000. Cause - The Hospital did not have an adequate internal control policy in place to ensure the proper funding of the reserve account. Effect - Although management obtained a waiver for the noncompliance, the lack of adequate policies governing proper funding of reserve increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs - None reported Context - Sampling was not used. The Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years - No Recommendation - We recommend that the Hospital enhance internal control policies to ensure that there is proper funding of the reserve accounts. Views of Responsible Officials - Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria - 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes and conditions of the award. Condition - During our testing, it was noted that one of the loan reserve accounts was underfunded by approximately $45,000. Cause - The Hospital did not have an adequate internal control policy in place to ensure the proper funding of the reserve account. Effect - Although management obtained a waiver for the noncompliance, the lack of adequate policies governing proper funding of reserve increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs - None reported Context - Sampling was not used. The Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years - No Recommendation - We recommend that the Hospital enhance internal control policies to ensure that there is proper funding of the reserve accounts. Views of Responsible Officials - Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing/CFDA 10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Center is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Section VI ? Conditions Required After Loan Closing in the Letter of Conditions dated May 4, 2016 for the USDA loan states that the audited financial statements must be provided to USDA within 150 days of year-end. In addition, the operating budget must be submitted to USDA within 30 days prior to the fiscal year-end. Condition: The Center?s fiscal year 2023 operating budget was not submitted during the period under audit and prior year audited financial statements were not submitted to USDA until USDA requested them, which was subsequent to the submission timeframe. Cause: The Center has been providing reported as requested by USDA rather than as outlined in the Letter of Conditions. Effect: The required reports are either not submitted or submitted outside of the time frame in the Letter of Conditions. Questioned Costs: None reported Context/Sampling: Sampling was not used Repeat Finding from Prior Year: No Recommendation: Management should implement processes and controls relating to the reporting requirements to comply with the Letter of Conditions Response: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing/CFDA 10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Center is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Section VI ? Conditions Required After Loan Closing in the Letter of Conditions dated May 4, 2016 for the USDA loan states that the audited financial statements must be provided to USDA within 150 days of year-end. In addition, the operating budget must be submitted to USDA within 30 days prior to the fiscal year-end. Condition: The Center?s fiscal year 2023 operating budget was not submitted during the period under audit and prior year audited financial statements were not submitted to USDA until USDA requested them, which was subsequent to the submission timeframe. Cause: The Center has been providing reported as requested by USDA rather than as outlined in the Letter of Conditions. Effect: The required reports are either not submitted or submitted outside of the time frame in the Letter of Conditions. Questioned Costs: None reported Context/Sampling: Sampling was not used Repeat Finding from Prior Year: No Recommendation: Management should implement processes and controls relating to the reporting requirements to comply with the Letter of Conditions Response: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing/CFDA 10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Center is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Section VI ? Conditions Required After Loan Closing in the Letter of Conditions dated May 4, 2016 for the USDA loan states that the audited financial statements must be provided to USDA within 150 days of year-end. In addition, the operating budget must be submitted to USDA within 30 days prior to the fiscal year-end. Condition: The Center?s fiscal year 2023 operating budget was not submitted during the period under audit and prior year audited financial statements were not submitted to USDA until USDA requested them, which was subsequent to the submission timeframe. Cause: The Center has been providing reported as requested by USDA rather than as outlined in the Letter of Conditions. Effect: The required reports are either not submitted or submitted outside of the time frame in the Letter of Conditions. Questioned Costs: None reported Context/Sampling: Sampling was not used Repeat Finding from Prior Year: No Recommendation: Management should implement processes and controls relating to the reporting requirements to comply with the Letter of Conditions Response: Management agrees with the finding.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers or Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the four Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers or Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the four Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers or Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the four Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers or Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the four Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Federal agency: Department of Education Federal program title: Educational Stabilization Fund Assistance Listing Numbers: 84.425E ? Higher Education Emergency Relief Fund (HEERF) Student Portion 84.425F ? Higher Education Emergency Relief Fund (HEERF) Institutional Portion Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Significant Deficiency in Internal Controls over Compliance. Criteria or specific requirement: The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. Condition: During our testing of HEERF reporting requirements at Flagler College, we noted: 1) Non-Compliant Institutional Reporting a. One of the two institutional reports selected for testing was not posted on the College?s website. 2) Non-Compliant Annual Reporting a. Total institutional expenditures in the annual report did not agree to supporting documentation. 3) Internal Control a. The review and approval control could not be traced to supporting records during testing for any report submitted. Questioned costs known: None. Context: There were 3 separate reporting requirements tested as part of the HEERF Program. Each of the reports had a unique number tested for both internal control and compliance. 1) Public reporting on the (a)(1) Student Aid Portion. a. Both reports tested (two of two) were noncompliant for internal control purposes. 2) Public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable. a. One of the reports tested was noncompliant for compliance requirements. b. Both reports tested (Two of two) were noncompliant for internal control purpose. 3) The Annual Report a. The one report tested was noncompliant for compliance and internal control purpose. Cause: The policies and procedures of the College did not ensure that grant reporting requirements were timely and accurately met. Effect: Non-compliance with federal regulations which could lead to untimely and incorrect reporting. Repeat Finding: Yes, 2021-002. Recommendation: We recommend that the College review their reporting policies and procedures to ensure accurate and timely reporting. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management has addressed their corrective action plan in a separately issued letter.
Federal agency: Department of Education Federal program title: Educational Stabilization Fund Assistance Listing Numbers: 84.425E ? Higher Education Emergency Relief Fund (HEERF) Student Portion 84.425F ? Higher Education Emergency Relief Fund (HEERF) Institutional Portion Award Period: July 1, 2021, to June 30, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Significant Deficiency in Internal Controls over Compliance. Criteria or specific requirement: The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. Condition: During our testing of HEERF reporting requirements at Flagler College, we noted: 1) Non-Compliant Institutional Reporting a. One of the two institutional reports selected for testing was not posted on the College?s website. 2) Non-Compliant Annual Reporting a. Total institutional expenditures in the annual report did not agree to supporting documentation. 3) Internal Control a. The review and approval control could not be traced to supporting records during testing for any report submitted. Questioned costs known: None. Context: There were 3 separate reporting requirements tested as part of the HEERF Program. Each of the reports had a unique number tested for both internal control and compliance. 1) Public reporting on the (a)(1) Student Aid Portion. a. Both reports tested (two of two) were noncompliant for internal control purposes. 2) Public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable. a. One of the reports tested was noncompliant for compliance requirements. b. Both reports tested (Two of two) were noncompliant for internal control purpose. 3) The Annual Report a. The one report tested was noncompliant for compliance and internal control purpose. Cause: The policies and procedures of the College did not ensure that grant reporting requirements were timely and accurately met. Effect: Non-compliance with federal regulations which could lead to untimely and incorrect reporting. Repeat Finding: Yes, 2021-002. Recommendation: We recommend that the College review their reporting policies and procedures to ensure accurate and timely reporting. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management has addressed their corrective action plan in a separately issued letter.
Finding 2022-001 U.S. Department of Transportation Assistance Listing Number 20.106 ? COVID-19 ? Airport Improvement Program Compliance and Internal Controls Deficiency over Reporting Repeat Findings: No Criteria: In accordance with 2 CFR ?200.303, The non-Federal entity must: (a) 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. Until the grant is completed and closed, the grantee is responsible for submitting SF-271 (construction projects) reports due 90 days after the end of each Federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition and Context: For 1 out of 3 selections, the County did not submit the reports timely to the Federal agency. Cause: The County did not have the controls and resources in place to ensure timely completion of the SF-271 (construction projects) report. Effect or Potential Effect: The County is not in compliance with the reporting requirement. Questioned Costs: None. Recommendation: We recommend that the Organization adhere to the required submission dates. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2022-001 U.S. Department of Transportation Assistance Listing Number 20.106 ? COVID-19 ? Airport Improvement Program Compliance and Internal Controls Deficiency over Reporting Repeat Findings: No Criteria: In accordance with 2 CFR ?200.303, The non-Federal entity must: (a) 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. Until the grant is completed and closed, the grantee is responsible for submitting SF-271 (construction projects) reports due 90 days after the end of each Federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition and Context: For 1 out of 3 selections, the County did not submit the reports timely to the Federal agency. Cause: The County did not have the controls and resources in place to ensure timely completion of the SF-271 (construction projects) report. Effect or Potential Effect: The County is not in compliance with the reporting requirement. Questioned Costs: None. Recommendation: We recommend that the Organization adhere to the required submission dates. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2022-001 U.S. Department of Transportation Assistance Listing Number 20.106 ? COVID-19 ? Airport Improvement Program Compliance and Internal Controls Deficiency over Reporting Repeat Findings: No Criteria: In accordance with 2 CFR ?200.303, The non-Federal entity must: (a) 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. Until the grant is completed and closed, the grantee is responsible for submitting SF-271 (construction projects) reports due 90 days after the end of each Federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition and Context: For 1 out of 3 selections, the County did not submit the reports timely to the Federal agency. Cause: The County did not have the controls and resources in place to ensure timely completion of the SF-271 (construction projects) report. Effect or Potential Effect: The County is not in compliance with the reporting requirement. Questioned Costs: None. Recommendation: We recommend that the Organization adhere to the required submission dates. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
Finding 2022-001 U.S. Department of Transportation Assistance Listing Number 20.106 ? COVID-19 ? Airport Improvement Program Compliance and Internal Controls Deficiency over Reporting Repeat Findings: No Criteria: In accordance with 2 CFR ?200.303, The non-Federal entity must: (a) 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. Until the grant is completed and closed, the grantee is responsible for submitting SF-271 (construction projects) reports due 90 days after the end of each Federal fiscal year in which this grant is open (due December 31 of each year this grant is open). Condition and Context: For 1 out of 3 selections, the County did not submit the reports timely to the Federal agency. Cause: The County did not have the controls and resources in place to ensure timely completion of the SF-271 (construction projects) report. Effect or Potential Effect: The County is not in compliance with the reporting requirement. Questioned Costs: None. Recommendation: We recommend that the Organization adhere to the required submission dates. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.
The Lawrence County Fiscal Court Did Not Establish And Maintain Effective Internal Controls Over Compliance With Coronavirus State and Local Fiscal Recovery Fund (SLFRF) Requirements Federal Program: Assistance Listing #: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: 2022 Name of Federal Agency: U.S. Department of the Treasury Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Reporting Type of Finding: Significant Deficiency Amount of Questioned Costs: $0 COVID Related: Yes The Lawrence County Fiscal Court transferred federal funds from the ARPA fund to the general, jail, road, LGEA, and E-911 funds without first ensuring sufficient supporting documentation of allowable expenditures during the same period as the funds were reported as expended on the Schedule of Expenditures of Federal Awards (SEFA). The county was awarded $2,975,148 in American Rescue Plan Act (ARPA) funds, receiving the first payment of $1,487,618 into the ARPA fund in May 2021, and their second payment of $1,487,530 in June 2022.The fiscal court?s transfers in total from the ARPA fund to each fund are provided below: ? General - $714,640 ? Road - $250,000 ? Jail - $40,000 ? LGEA - $25,000 ? E-911 - $10,000 ? Payroll - $217,739 These transfers from the ARPA fund were considered ?lost revenue? according to their fiscal court meeting minutes. At the time of these transfers, and until auditors inquired about the supporting documentation, the county did not maintain a list of expenditures that reconciled to the transfer total. After this inquiry, the county gathered documentation and provided auditors a reconciliation of expenditures of eligible costs that supported the amount transferred into the general fund. An effective internal control system was not in place in Lawrence County to ensure compliance with requirements related to the administration of ARPA funds and the Allowable Costs/Cost Principles compliance requirements. The lack of internal controls was a systemic issue throughout the period. Failure to establish and maintain effective internal controls over compliance with federal program requirements could subject the county to the risk of reporting ineligible expenditures on the SEFA and using grant funds for unallowable purposes. 2 CFR 200.303 states in part, ?[t]he non-Federal entity must: (a) 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.? 2 CFR ?200.302(b) states, ?[t]he financial management system of each non-Federal entity must provide for the following ?: (2) [a]ccurate, current and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set for in ?200.328 and 200.329.? In addition, 2 CFR ?200.502(a) states, ?[t]he determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.? Therefore, the county should only include expenditures on the Schedule of Expenditures of Federal Awards (SEFA) for which there is sufficient supporting documentation. We recommend the county establish and maintain internal controls over compliance for all federal program expenditures to ensure accurate use and reporting of federal awards, including maintaining sufficient supporting documentation of expenditures that reconciles to any transfer from a federal program fund into other county funds.
2022-002 Department of Health and Human Services Federal Financial Assistance Listing/CFDA #93.498 Provider Relief Fund Applicable Federal Award Number and Year ? Period 2 TIN #870290963 Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The total lost revenues included on the report submitted to the Health Resources and Services Administration (HRSA) for Period 2 (Period 2 Report) utilizing Option 3, as defined by HRSA, contained errors. Cause: The Organization did not have an internal control process in place to ensure the calculation of lost revenues was properly calculated. Accordingly, errors in the lost revenue calculation spreadsheet were not identified by management. Effect: The reporting to HRSA for Period 2 was considered incorrect. Lost revenues were included on the report that were not supportable. Questioned Costs: $402,342. The Organization received $801,742 during Period 2. After the error noted, the corrected lost revenues and eligible expenditures totaled $399,400. Context: All key items associated with the five quarters of revenue initially claimed as eligible under the Option 3 lost revenue calculation were tested. There were significant differences noted in all five quarters tested for a difference of $402,342 between the funds received and the revised lost revenues calculated. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process to ensure the lost revenue calculation is accurately calculated. Views of Responsible Officials: Management agrees with this finding and is designing and implementing policies and procedures to address the cause of this finding.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
2022-004 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition: In our sample of reports selected for testing, we noted the following items; a) No support could be provided to substantiate a secondary level of review was completed for student and institutional portion quarterly reports for the quarters ended 12/31/2021 and 3/31/2022 and the year two annual report. b) Student portion quarterly reports ending 12/31/2021 and 3/31/2022 reported cumulative expenditures incurred from the inception of the federal program rather than expenditures incurred within the quarter, resulting in an error of $105,202 in the first report and $165,154 in the second report. Cause: There was a lapse in oversight of the internal control process ensuring expenditures reported were accurate and reconciled to supporting documentation. The College failed to identify the change in reporting requirements between HEERF awards. Effect: The College?s controls did not detect or correct the errors identified, which resulted in inaccurate expenditures reported within HEERF quarterly reports. Additionally, not having a formal oversight process over reporting results in a reasonable possibility that reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported. Context/Sampling: Four out of eight quarterly reports were reviewed along with one annual report. Repeat Finding from Prior Year: Yes, prior year finding 2021-003. Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above and ensure documentation is retained supporting a secondary level of review is completed prior to submission of required reports. Views of Responsible Officials: Management is in agreement with the finding.
2022-005 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any vendor who is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The College?s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, two vendors were not verified against the central contractor registry prior to expenses incurred to ensure that the vendor was not suspended or debarred. Cause: The College?s procurement policy does not include all the required elements as outlined in the Uniform Guidance. There was a lapse in oversight of the internal control process ensuring vendors are verified against the central contractor registry. Effect: Without a written procurement policy in accordance with the Uniform Guidance, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Failing to verify vendors against the central contractor registry may result in the College contracting for services with ineligible parties Questioned Costs: None reported. Context/Sampling: The College had two transactions totaling $120,822 equaling or exceeding $25,000 that were selected for suspension and debarment testing. Those two contracts selected for testing totaled $120,822. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
2022-004 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition: In our sample of reports selected for testing, we noted the following items; a) No support could be provided to substantiate a secondary level of review was completed for student and institutional portion quarterly reports for the quarters ended 12/31/2021 and 3/31/2022 and the year two annual report. b) Student portion quarterly reports ending 12/31/2021 and 3/31/2022 reported cumulative expenditures incurred from the inception of the federal program rather than expenditures incurred within the quarter, resulting in an error of $105,202 in the first report and $165,154 in the second report. Cause: There was a lapse in oversight of the internal control process ensuring expenditures reported were accurate and reconciled to supporting documentation. The College failed to identify the change in reporting requirements between HEERF awards. Effect: The College?s controls did not detect or correct the errors identified, which resulted in inaccurate expenditures reported within HEERF quarterly reports. Additionally, not having a formal oversight process over reporting results in a reasonable possibility that reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported. Context/Sampling: Four out of eight quarterly reports were reviewed along with one annual report. Repeat Finding from Prior Year: Yes, prior year finding 2021-003. Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above and ensure documentation is retained supporting a secondary level of review is completed prior to submission of required reports. Views of Responsible Officials: Management is in agreement with the finding.
2022-005 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any vendor who is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The College?s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, two vendors were not verified against the central contractor registry prior to expenses incurred to ensure that the vendor was not suspended or debarred. Cause: The College?s procurement policy does not include all the required elements as outlined in the Uniform Guidance. There was a lapse in oversight of the internal control process ensuring vendors are verified against the central contractor registry. Effect: Without a written procurement policy in accordance with the Uniform Guidance, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Failing to verify vendors against the central contractor registry may result in the College contracting for services with ineligible parties Questioned Costs: None reported. Context/Sampling: The College had two transactions totaling $120,822 equaling or exceeding $25,000 that were selected for suspension and debarment testing. Those two contracts selected for testing totaled $120,822. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.