Finding Text
Federal Agency: U.S. Department of Education
Federal Program Title: Student Financial Assistance Cluster
Assistance Listing Number: 84.268 – Federal Direct Loans
Federal Award Identification Number and Year: P268K220355 - 2023
Award Period: July 1, 2022 to June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance; Compliance, Other Matter
Criteria or specific requirement: Per the 2022-2023 FSA Handbook Volume 4 Chapter 6, A school that participates in the Direct Loan Program is required to reconcile cash (funds it received from the G5 system to pay its students) with disbursements (actual disbursement records) it submitted to the Common Origination and Disbursement (COD) system monthly. In addition, per the Uniform Guidance 2 CRF 200.303, non-federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonable ensure compliance with federal laws, regulations, and program compliance requirements.
Condition: The College did not perform monthly direct loan reconciliations and reconciliations were not reviewed by someone other than the preparer.
Questioned Costs: None Context: During our testing, we noted that the College did not perform one of three reconciliations selected for testing, and the College could not provide support for review performed of the other two of the three reconciliations selected for testing.
Cause: The College started but never finished or saved the missing direct loan reconciliation. In addition, the College did not set up procedures to include review of the reconciliation.
Effect: The College is not in compliance with the requirement to perform monthly reconciliations and establishing and maintaining good internal controls.
Repeat Finding: No.
Recommendation: We recommend the College implement procedures to ensure direct loan reconciliations are performed monthly and are reviewed by someone other than the preparer.
Views of responsible officials: There is no disagreement with the audit finding.