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), 84.007 (Supplemental Educational Opportunity Grant), 84.033 (College Work Study), 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: According to 34 CFR 668.55, institutions are required to verify certain information provided by students on their Free Application for Federal Student Aid (FAFSA) and update any discrepancies in the COD system. Accurate and timely updates to COD are essential to ensure the proper administration of federal student aid programs and to prevent improper payments.
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 student financial aid program, we identified that verification information for 1 (3%) of 40 students tested had a discrepancy between the information in their financial aid file and the data reported in the Common Origination and Disbursement (COD) system.
Questioned costs: None
Context: The District participates in federal student aid programs, which require strict adherence to federal regulations regarding the verification of student information. Verification is a process mandated by the U.S. Department of Education to confirm the accuracy of information provided by students on their FAFSA. Institutions must verify certain data elements and update any discrepancies in the COD system. Accurate and timely updates to COD are essential to ensure the proper administration of federal student aid programs, prevent improper payments, and maintain the integrity of the financial aid process.
Cause: The discrepancy was primarily due to a lack of adequate internal controls and oversight in the verification process to consistently and accurately update the COD system.
Effect: Failure to update verification information in COD can lead to incorrect disbursement of federal student aid funds, potentially resulting in overpayments or underpayments, and can affect the institution's eligibility to participate in these programs.
Repeat finding: No
Recommendation: We recommend the District implement stronger internal controls and oversight procedures to ensure that all verification information is accurately and timely updated in the COD system. This may include additional training for financial aid staff, regular reconciliation of financial aid files with COD data, and periodic internal audits to ensure compliance with federal regulations.
Views of responsible officials: Students in the Pell Grant Verification Status (PGVS) file will be reviewed by a Financial Assistance Advisor for Pell and another Financial Assistance Advisor for Verification to make sure all appropriate flags are set correctly in the system. Once this review is complete, Pell will be re-originated. If students persist in the PGVS file, a help desk ticket will be filled with our Information Technology department to investigate why the record is still showing as not verified. This new review process will provide additional oversight in the verification process.