Finding 1125114 (2024-002)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-03-31
Audit: 351998
Organization: Stevenson University, Inc. (MD)
Auditor: Bdo USA PC

AI Summary

  • Core Issue: The University failed to verify required information for some students selected for verification, leading to non-compliance with federal regulations.
  • Impacted Requirements: Verification procedures for adjusted gross income, household size, and untaxed income were not properly followed, affecting 3 out of 16 students tested.
  • Recommended Follow-Up: Enhance internal controls and verification processes, ensuring all staff are adequately trained and that a complete list of students selected for verification is maintained.

Finding Text

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), Federal Direct Student Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Verification - An institution shall require an applicant selected for verification to submit acceptable documentation that will verify or update the following information used to determine the applicant's expected family contribution: adjusted gross income, U.S. income tax paid, aggregate number of family members in the household, number of family members in the household who are enrolled in as at least half-time students in postsecondary educational institutions if that number is greater than one and untaxed income subject to U.S. income tax reporting requirements in the base year which is included on the tax return form, excluding information contained on schedules appended to such forms. Untaxed income and benefits include: Social Security benefits if the institution has reason to believe that those benefits were received and were not reported or were not correctly reported; child support if the institution has reason to believe child support was received; U.S. income tax deductions for a payment made to an individual retirement account or Keough account; interest on tax-free bond; foreign income excluded from U.S. income taxation if the institution has reason to believe that foreign income was received; and all other untaxed income subject to U.S. income tax reporting requirements in the base year included on the tax return form, excluding information contained on schedules appended to such forms (34 CFR section 668.56). Condition: For certain students selected for verification, the information required to be verified did not match the underlying supporting documentation. In addition, the University was unable to provide a complete listing of students selected for verification. Cause: Administrative oversight and insufficient internal control. Effect: The University was not in compliance with verification compliance requirements. Questioned Costs: None. Context: For 3 of 16 students selected for verification testing, the University did not perform appropriate verification procedures. Identification of Repeat Finding: This is a repeat of prior year finding 2023-005. Recommendation: We recommend the University enhance its procedures and internal controls to ensure that the appropriate verification procedures are performed for all students who are selected for verification unless excluded by the federal regulations. Views of Responsible Officials and Planned Corrective Actions: During the 2024 fiscal year, the Financial Aid office experienced several staffing changes, including hiring a new Director of Financial Aid. They also contracted with a third-party servicer that assisted with the verification process. The newly hired staff did not receive the proper training to perform their roles effectively. These two changes led to errors in verifying certain data when performing verification. The Financial Aid office implemented a Quality Assurance two-step verification process, but this took place after some of the 23-24 awards were processed. The Financial Aid office will run a report to identify all students selected for verification for 2024-2025 and review them for accuracy. If any corrections are needed, they will be updated, and awards will be adjusted as needed.

Categories

Student Financial Aid Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking Special Tests & Provisions Reporting

Other Findings in this Audit

  • 548665 2024-002
    Significant Deficiency Repeat
  • 548666 2024-006
    Significant Deficiency Repeat
  • 548667 2024-007
    - Repeat
  • 548668 2024-001
    Significant Deficiency Repeat
  • 548669 2024-002
    Significant Deficiency Repeat
  • 548670 2024-003
    Significant Deficiency
  • 548671 2024-001
    Significant Deficiency Repeat
  • 548672 2024-002
    Significant Deficiency Repeat
  • 548673 2024-005
    Significant Deficiency Repeat
  • 548674 2024-006
    Significant Deficiency Repeat
  • 548675 2024-002
    Significant Deficiency Repeat
  • 548676 2024-004
    Significant Deficiency Repeat
  • 548677 2024-005
    Significant Deficiency Repeat
  • 548678 2024-006
    Significant Deficiency Repeat
  • 1125107 2024-002
    Significant Deficiency Repeat
  • 1125108 2024-006
    Significant Deficiency Repeat
  • 1125109 2024-007
    - Repeat
  • 1125110 2024-001
    Significant Deficiency Repeat
  • 1125111 2024-002
    Significant Deficiency Repeat
  • 1125112 2024-003
    Significant Deficiency
  • 1125113 2024-001
    Significant Deficiency Repeat
  • 1125115 2024-005
    Significant Deficiency Repeat
  • 1125116 2024-006
    Significant Deficiency Repeat
  • 1125117 2024-002
    Significant Deficiency Repeat
  • 1125118 2024-004
    Significant Deficiency Repeat
  • 1125119 2024-005
    Significant Deficiency Repeat
  • 1125120 2024-006
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $28.53M
84.063 Federal Pell Grant Program $5.55M
84.007 Federal Supplemental Educational Opportunity Grants $306,787
84.033 Federal Work-Study Program $267,710