FAC Explorer

Finding 1077568 (2023-003)

Material Weakness
Requirement
E
Questioned Costs
$1
Year
2023
Accepted
2024-09-30
Audit: 323383
Organization: The Carle Foundation (IL)
Auditor: Kpmg

AI Summary

  • Core Issue: Methodist College awarded subsidized loans exceeding the $23,000 limit for one student, indicating a failure in loan packaging controls.
  • Impacted Requirements: The college did not comply with federal loan limits as outlined in 34 CFR 685.203, and lacked effective internal controls as required by 2 CFR 200.303.
  • Recommended Follow-Up: Review and improve procedures for student aid packaging to prevent future over-awards and ensure compliance with federal guidelines.

Finding Text

Finding 2023-003: Over-awarding of subsidized Direct Loans Condition Found Methodist College (Carle) awarded and disbursed subsidized loans in excess of aggregate loan limits for the 2022 to 2023 aid year. In our testing of 40 samples, one student was awarded an aggregate of $24,500 for subsidized loans which exceeded the $23,000 limit for subsidized loans. Further, we noted that the review control over student aid packaging was not operating effectively in the period. The College disbursed FDL loans to 292 students and Pell grants to 193 students during the year ended December 31, 2023 for which eligibility and disbursement requirements applied. The number of undergraduate students enrolled in the College during fiscal year 2023 was 528. Criteria Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan program prior to 2010) are $57,500 for independent undergraduate students (and for dependent students whose parents are unable to borrow Direct PLUS Loans, not more than $23,000 of which may be subsidized. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student aid awarded are within the limits set by USDE. Cause When reviewing files the FAFSA for this student showed a Sub award total of $19,000. Her original loan was disbursed for $2750. It seems likely that this students ISIR was looked at with the $19,000 SUB and awarded incorrectly based on the $19,000 figure. Possible Asserted Effect Inappropriate awarding of aid are considered questioned costs and may lead to penalties, repayments, and other corrective actions. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling No sampling was performed. Recommendation We recommend the College review its procedures to ensure appropriate student aid packaging to ensure amounts do not exceed subsidized limitation guidelines. Views of Carle management: Methodist College agrees with the finding of an over award for the one student in question. Corrective Action Plan: In standing financial aid meetings, we will review Federal Loan limits and what our process/procedures are if a student is close to limits to insure, we don’t over award. Contact Person(s): Justina Kirchgessner Anticipated Completion Date:2024

Categories

Questioned Costs Student Financial Aid Matching / Level of Effort / Earmarking Eligibility

Other Findings in this Audit

  • 501115 2023-001
    Material Weakness Repeat
  • 501116 2023-001
    Material Weakness Repeat
  • 501117 2023-001
    Material Weakness Repeat
  • 501118 2023-001
    Material Weakness Repeat
  • 501119 2023-002
    Material Weakness
  • 501120 2023-002
    Material Weakness
  • 501121 2023-002
    Material Weakness
  • 501122 2023-002
    Material Weakness
  • 501123 2023-003
    Material Weakness
  • 501124 2023-003
    Material Weakness
  • 501125 2023-003
    Material Weakness
  • 501126 2023-003
    Material Weakness
  • 501127 2023-004
    Material Weakness
  • 501128 2023-004
    Material Weakness
  • 501129 2023-004
    Material Weakness
  • 501130 2023-004
    Material Weakness
  • 1077557 2023-001
    Material Weakness Repeat
  • 1077558 2023-001
    Material Weakness Repeat
  • 1077559 2023-001
    Material Weakness Repeat
  • 1077560 2023-001
    Material Weakness Repeat
  • 1077561 2023-002
    Material Weakness
  • 1077562 2023-002
    Material Weakness
  • 1077563 2023-002
    Material Weakness
  • 1077564 2023-002
    Material Weakness
  • 1077565 2023-003
    Material Weakness
  • 1077566 2023-003
    Material Weakness
  • 1077567 2023-003
    Material Weakness
  • 1077569 2023-004
    Material Weakness
  • 1077570 2023-004
    Material Weakness
  • 1077571 2023-004
    Material Weakness
  • 1077572 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.399 Cancer Control $2.41M
84.268 Federal Direct Student Loans $2.28M
32.006 Covid-19 Telehealth Program $643,231
93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services $604,775
21.027 Coronavirus State and Local Fiscal Recovery Funds $600,000
84.063 Federal Pell Grant Program $599,878
93.470 Elder Abuse Prevention Interventions Program $552,758
93.846 Arthritis, Musculoskeletal and Skin Diseases Research $370,562
93.045 Special Programs for the Aging, Title Iii, Part C, Nutrition Services $352,357
93.889 National Bioterrorism Hospital Preparedness Program $144,106
93.788 Opioid Str $144,025
93.044 Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $132,939
84.425 Education Stabilization Fund $100,731
93.048 Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $95,760
14.181 Supportive Housing for Persons with Disabilities $79,250
93.837 Cardiovascular Diseases Research $76,368
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $72,442
93.958 Block Grants for Community Mental Health Services $72,248
93.052 National Family Caregiver Support, Title Iii, Part E $71,856
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $57,623
93.959 Block Grants for Prevention and Treatment of Substance Abuse $56,582
93.994 Maternal and Child Health Services Block Grant to the States $50,000
93.242 Mental Health Research Grants $48,857
84.007 Federal Supplemental Educational Opportunity Grants $43,718
84.033 Federal Work-Study Program $38,556
93.301 Small Rural Hospital Improvement Grant Program $35,814
93.747 Elder Abuse Prevention Interventions Program $33,688
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $33,094
93.155 Rural Health Research Centers $32,231
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $28,660
93.838 Lung Diseases Research $25,305
93.286 Discovery and Applied Research for Technological Innovations to Improve Human Health $23,288
93.368 21st Century Cures Act - Precision Medicine Initiative $14,000
93.043 Special Programs for the Aging, Title Iii, Part D, Disease Prevention and Health Promotion Services $6,543
93.279 Drug Abuse and Addiction Research Programs $6,342
93.575 Child Care and Development Block Grant $6,127
12.420 Military Medical Research and Development $5,000
93.865 Child Health and Human Development Extramural Research $1,130
93.569 Community Services Block Grant $1,085
21.006 Tax Counseling for the Elderly $680
93.395 Cancer Treatment Research $624
93.273 Alcohol Research Programs $387
93.041 Special Programs for the Aging, Title Vii, Chapter 3, Programs for Prevention of Elder Abuse, Neglect, and Exploitation $20
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $0