Finding Text
Finding 2024-001 Federal Programs: Student Financial Assistance Cluster • Federal Pell Grant Program (ALN 84.063) Federal Agency – U.S. Department of Education Federal Award Year – January 1, 2024 to December 31, 2024 Compliance Requirement - Reporting Criteria Requirement: Under the Pell grant and the Direct and Federal Family Education Loan programs, Institutions must submit Direct Loan and Pell Grant disbursement records to the COD System no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. See Federal Register Volume 86, Number 119, June 24, 2021. The Department considers that Title IV funds are disbursed on the date that schools (a) credit those funds in their general ledger or any subledger to a student’s account or (b) pay those funds to a student or parent directly. Title IV aid is disbursed even if schools use their own funds in advance of receiving program funds from the Department. Failure to submit disbursement records within the required time frame may result in a rejection of all or part of the reported disbursement, an audit or program review finding, or possible fines or other penalties. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. Key items to test on origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Key items to test on disbursement records are Under the Pell grant and the Direct and Federal Family Education Loan programs, Institutions must submit Direct Loan and Pell Grant disbursement records to the COD System no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. Failure to submit disbursement records within the required time frame may result in a rejection of all or part of the reported disbursement, an audit or program review finding, or possible fines or other penalties. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. Key items to test on origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Key items to test on disbursement records are disbursement date and amount. The information may be accessed by the institution for the auditor. Condition Found: For 3 students out of 60 selected for testwork, the institution inaccurately reported the date of enrollment of the student to the COD system, which represents one out of the nine required data elements to be reported to the COD. The differences in enrollment dates were 2 - 16 days. Cause and Possible Asserted Effect: The institution’s control to reconcile the data between the institution’s records and COD system was not designed effectively to ensure accurate data is reported to COD on a timely basis. Identification of Questioned Costs: There are no questioned costs related to this finding. Sampling: The sample was not intended to be and was not a statistically valid sample. Identification of Repeat Finding: This audit finding is not a repeat finding in the prior year. Recommendation: Our recommendation is for management to reinforce and provide training to individuals responsible for compliance control ownership. This will help ensure that controls are designed and implemented effectively; as well as functioning as intended and control ownership is established, thereby preventing or promptly identifying and rectifying instances of noncompliance. Further, management should maintain appropriate documentation evidencing the control performance. In particular, it is advised to enhance processes and controls related to the accurate reporting of Institution’s records to COD system for all required data elements. Views of Responsible Officials: The College agrees with the recommendation provided. The College is in process to include a full review of processes and controls related to monthly COD/NLSDS reconciliation. The College’s third-party servicer is assisting in this training as well as the update of policies, processes, and controls, as well as the maintenance of evidentiary documentation, to ensure accuracy moving forward.