Finding 1156458 (2024-001)

Material Weakness Repeat Finding
Requirement
CEHL
Questioned Costs
$1
Year
2024
Accepted
2025-09-29
Audit: 368771
Organization: Southwestern Christian College (TX)

AI Summary

  • Core Issue: The College has significant deficiencies in compliance with Title IV regulations, leading to questioned costs of $29,087.
  • Impacted Requirements: Key areas of non-compliance include missing documentation for reconciliations, inaccurate enrollment reporting, and incomplete Federal Work-Study files.
  • Recommended Follow-Up: Implement corrective actions, including monthly reconciliations, accurate reporting to NSLDS, and maintaining all necessary documentation to prevent future issues.

Finding Text

Finding 2024-001 – U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (significant deficiency): Information on the Federal Program: Federal Direct Student Loans, FAL No. 84.268, June 30, 2024; Federal Pell Grants Program, FAL No. 84.063, June 30, 2024; Federal Supplemental Educational Opportunity Grant, FAL No. 84.007, June 30, 2024; Federal Work-Study Program, FAL No. 84.033, June 30, 2024. Criteria – Federal regulations governing Title IV programs. Condition – Non-compliances were noted, as more fully described in the context below. Questioned Costs – $29,087 Context – We observed the following conditions in connection with our testing of the various U.S. Department of Education, Title IV, Student Financial Assistance Programs a) Documentation to support the College’s reconciliations of its Title IV programs between the Business Office and the Office of Financial Aid were not available. 34 CFR 685.300(b)(5). b) Four (4) out of 10 students did not have timely or accurate enrollment reporting to the National Student Loan Data System (NSLDS). 34 CFR 685.309(b). c) The College did not submit Federal Work-Study files for one (1) out of seven (7) students selected for testing. As a test of controls, we were unable to verify Federal Work-Study check endorsements against canceled checks. 34 CFR Part 675. d) Documentation to support student refund testing was not provided. 34 CFR 668.164(h)(1). e) The College did not submit verification documentation for three (3) out of 10 students selected for testing. 34 CFR 668.54 f) We were unable to fully test the Fiscal Operations Report and Application to Participate (FISAP) since the Title IV reconciliations were not provided. 34 CFR 674.19 Cause – Oversight by responsible employees. Effect – The College’s participation in the Title IV programs could be subject to USDE sanctions as applicable. Repeat Finding – Yes Auditor’s Recommendation – The College should implement corrective actions to ensure that the above findings are resolved and will not recur in future periods. Views of Responsible Officials – Management shall prepare monthly reconciliations of the College’s Title IV programs between the Business Office and the Office of Financial Aid. In addition, copies of the Fiscal Operations Report and Application to Participate (FISAP) shall be retained and completed such that Title IV reconciliations can be fully tested. Accurate student enrollment information shall be maintained and reported to the National Student Loan Data System (NSLDS). Federal Work-Study files shall be maintained for all Work-Study students. Complete student refund documentation shall be maintained for all applicable students. Required FAFSA verification documentation shall be obtained and retained for all applicable students. Management of the College will work to implement corrective actions to ensure that the above findings will not recur in future periods.

Corrective Action Plan

Finding 2024-001: U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (significant deficiency): Condition (per audit): Non-compliance with Title IV requirements, including missing reconciliations, inaccurate/untimely NSLDS reporting, incomplete Work-Study files, missing refund documentation, incomplete FAFSA verification records, and unavailable FISAP reconciliation documentation. Questioned Costs: $29,087 Corrective Actions (overseen by the President): 1. Monthly Title IV Reconciliations o Beginning August 2025, monthly reconciliations between the Business Office and Financial Aid Office will be conducted and logged in the new centralized electronic filing system in Populi for audit readiness and continuity during staff transitions. o To further strengthen the process, two additional staff members, a new Accounts Payable Manager and Comptroller, with extensive audit and business office management and grants management/reconciliation experience, and has been added to the Business Office. o Reconciliation logs will be retained in the centralized electronic filing system in Populi. o Responsible Official: Comptroller/ Business Office Staff 2. Electronic Filing System o To address missing FISAP, refund, and Work-Study documentation, SwCC implemented an organized electronic filing system in Populi by funding stream, year, and document type. o Includes FISAP, Work-Study timesheets, NSLDS reports, and refund documentation. o Responsible Official: Financial Aid Director and Business Office. 3. Enrollment Reporting to NSLDS o To address untimely/incorrect reporting, weekly enrollment status reports will be submitted through Populi and verified with the Registrar. o SwCC is finalizing its agreement with the National Student Clearinghouse to further improve accuracy. o Responsible Official: Registrar. 4. Work-Study Documentation o To address missing student files, all Work-Study records (award letters, timesheets, disbursement records) will be scanned and retained in each student’s electronic file. o Responsible Official: Financial Aid Director. 5. Refund Documentation o To address missing refund testing documentation, all refund calculations will be cross-verified by the Business Office and Financial Aid Office, and approved by the President before posting. o Records will be stored in the filing system. o Responsible Official: Comptroller/ Business Office and Financial Aid Office 6. FAFSA Verification o To address incomplete verification documentation, SwCC uses a standardized verification checklist. The Populi system does not allow disbursement of student files selected for verification. A manual override is required, and these overrides will continue to be managed within the Office of Financial Aid for disbursement. o Responsible Official: Financial Aid Director. 7. FISAP Retention o To address unavailable FISAP records, annual FISAP submissions will be stored in the electronic filing system for future testing and audit review. o Responsible Official: Comptroller/ Business Office and Financial Aid Office Completion Date: Initial corrective actions completed by August 31, 2025. Ongoing monitoring monthly/quarterly as required.

Categories

Questioned Costs Student Financial Aid

Other Findings in this Audit

  • 1156455 2024-001
    Material Weakness Repeat
  • 1156456 2024-001
    Material Weakness Repeat
  • 1156457 2024-001
    Material Weakness Repeat
  • 1156459 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $1.13M
84.063 Federal Pell Grant Program $520,963
84.031 Higher Education_institutional Aid $276,255
16.710 Public Safety Partnership and Community Policing Grants $114,002
84.007 Federal Supplemental Educational Opportunity Grants $101,460
84.268 Federal Direct Student Loans $89,590
84.033 Federal Work-Study Program $82,880