Finding Text
SECTION III
Federal Award Findings and Questioned Costs
2024-001 Significant Deficiency – Federal Direct Loan Cash Management
Programs: Federal Direct Loan Program, Pell Grant Program
Assistance Listing Numbers: 84.268 and 84.007
Federal Award Identification Number: NT9ZXAKM3CR3
Federal Agency: U.S. Department of Education
Federal Award Year: June 30, 2024
Condition: During the Spring semester, the College did not minimize the time between fund transfers and return of excess funds for drawdowns made from late January through February 2024.
Criteria: The Advance Payment Method requires that the College disburse the requested funds no later than three business days following receipt of funds received from the Education Department.
Context: A review of the entire population of drawdowns for the Student Financial Aid cluster for the entire year was performed and as such, the sample is statistically valid.
Cause: The student information system used by the College malfunctioned in the creation of duplicate batches of awards for students. Students in duplicated batches (for which money had been drawn down) were now in new batches- resulting in overdrawn funds.
Effect: The College did not refund excess funds drawn on a timely basis. It took them until May 2024 to fully research the system issues and make the necessary corrections and refunds.
Questioned costs: $100,467
Recommendation: The College should review its procedures related to the request and disbursement of federal funds, including controls over compliance, to ensure they are following the advance payment method and establish controls to ensure it complies with the federal requirement.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and implemented a new tracking system in July 2024 for daily reconciliation of award batch detail along with specific individual training to ensure staff follows compliance responsibilities and understand the requirements of the program. The Controller and Financial Aid Director meet monthly to discuss any potential gaps in compliance.