Finding Text
Federal Agency: U.S. Department of Education
Federal Program Name: Student Financial Assistance Cluster
Assistance Listing Number: 84.063 (Federal Pell Grant Program), 84.268 (Federal Direct Student Loans Program)
Federal Award Identification Number and Year: N/A; 2023-2024
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period: July 1, 2023 – June 30, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance; Other Matters
Criteria or specific requirement: Federal regulations and related guidance governing Title IV student aid programs requires institutions to accurately and timely report enrollment information to the National Student Loan Data System (NSLDS). Institutions must ensure that the reported data is complete and accurate, reflecting the student's actual enrollment status at the campus and program levels, including full-time, half-time, graduated, withdrawn, or any other status changes. This requirement helps maintain the integrity of the federal student aid programs and ensures that students' loan repayment statuses are correctly managed (NSLDS Enrollment Reporting Guide, November 2022, Chapter 2).
Changes in enrollment status must be reported within 60 days of determining the student's status has changed. In addition, institutions must certify enrollment status on an ongoing basis, at least every 60 days (NSLDS Enrollment Reporting Guide, November 2022, Chapter 5).The data reported, including the effective date of enrollment status, must match the institution's internal records and reflect the student's current enrollment status (NSLDS Enrollment Reporting Guide, November 2022, Chapter 4). Finally, if the institution uses a third-party servicer for reporting, it must ensure that the servicer complies with all federal reporting requirements (NSLDS Enrollment Reporting Guide, November 2022, Chapter 3, Section 3.3).
According to 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: During our audit of the District's enrollment reporting to NSLDS, for 26 (65%) of 40 students tested, the District did not accurately and timely report enrollment status changes to NSLDS. Specifically:
• 14 of these students did not have the correct enrollment status reported;
• 23 of these students did not have the enrollment status effective date reported accurately;
• 18 of these students did not have their enrollment status change reported within 60 days of the date the District determined the change in status;
• 17 of these students did not have their enrollment status verified on an ongoing basis per the required 60-day timeframe during the fiscal year.
Questioned costs: None
Context: The District uses the services of the National Student Clearinghouse (NSC) to report status changes to NSLDS. Under this arrangement, the District reports all students enrolled and their status to NSC. NSC then identifies any changes in status and reports those changes to NSLDS when required. Although the District uses the services of NSC, the District still has the primary responsibility to report any changes in student enrollment status accurately and in a timely manner.
Cause: A control system to prevent and detect errors in the reporting process was not created to ensure all required reporting compliance was filed timely.
Effect: Failure to comply with these reporting requirements can result in administrative actions, including fines and penalties, and can affect the institution's eligibility to participate in federal student aid programs. Non-compliance may also lead to inaccurate loan repayment statuses for students, potentially causing financial hardship.
Repeat finding: No
Recommendation: We recommend that the District enhance its oversight and monitoring of the third-party service provider responsible for reporting enrollment status changes to NSLDS.
Views of responsible officials: The College acknowledges that a submission error occurred in Spring 2023, resulting in several students not being included in the routine semester enrollment submissions to the National Student Clearinghouse (NSC). Beginning in Spring 2024, our Institutional Research department initiated a comprehensive process to resubmit corrected enrollment files to the NSC, covering Spring 2023, Summer 2023, and Fall 2023. In collaboration with NSC, we followed their established process to rectify the error, which required reloading each submission one at a time in succession from the original submission with the error. This process caused delays in our subsequent submissions until the corrections were fully completed. To prevent recurrence, we have implemented enhanced checks and controls prior to each submission to review the file and file size to ensure the correct number of students are submitted to NSC. Additionally, all submissions post-Spring 2023 have been reviewed, and we have confirmed that this was an isolated incident.