Finding Text
Cash Management Significant Deficiency
DEPARTMENT OF EDUCATION
ALN #: 84.268, 84.063 and 84.033
Federal Award Identification #: 2022-2023 Financial Aid Year
Condition: The College initiated three Federal Direct Loan and four Pell drawdowns from G5 for amounts greater than what had been disbursed to students. Additionally, Federal Work Study funds were drawn down and not disbursed within the required timeframe.
Criteria: 34 CFR 668.166(a)
Questioned Costs: $0
Context: During our audit, it was noted that 3 Federal Direct Loan drawdowns out of 5 tested and 4 Pell drawdowns out of 4 tested did not properly tie to student disbursement rosters related to the draw. Additionally, it was noted that the College drew down all Federal Work Study funds at the beginning of the fall semester before any of these funds were earned by the students.
Cause: Turnover and staffing challenges in the financial aid office. Additionally, reconciliations were not being performed throughout the year. See finding 2023-010.
Effect: The College appears to have excess cash on hand at certain times throughout the year, however at the end of the financial aid year they had disbursed more than they had drawn. Federal Work Study funds were disbursed by the end of the fall semester.
Identification as repeat finding, if applicable: 2022-004
Recommendation: We recommend that the College review its reconciliation process and implement controls to ensure that funding is drawn and disbursed within three business days of receipt. We also recommend that the College review student disbursement reports generated to determine drawdown amounts before making draws from G5.
Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.