Finding 1173458 (2025-001)

Material Weakness Repeat Finding
Requirement
EN
Questioned Costs
-
Year
2025
Accepted
2026-02-13
Audit: 387191
Organization: Reid State Technical College (AL)

AI Summary

  • Core Issue: Two out of 40 students received Pell grant overpayments due to errors in clock-to-credit-hour conversions.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) and 34 CFR Part 690 regarding internal controls and accurate enrollment calculations.
  • Recommended Follow-Up: Implement stronger controls to ensure timely updates of data files and review of conversions before awarding federal aid.

Finding Text

Item 2025-001 Eligibility/Program Eligibility Federal Pell Grant Program ALN# 84.063 U.S. Department of Education Grant period – 2025-2026 Award Year Criteria – In accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 34 CFR Part 690 Pell grants are required to be calculated using a distinct set of criteria based on enrollment. Condition – 2 of 40 students tested received overpayments of Pell grants. Errors in clock-to-credit-hour conversions resulted in inaccurate enrollment intensities used in the Pell calculations for these students. Cause – The data file for the clock-to-credit hour conversion was not uploaded into the College's system prior to calculation of the students' enrollment intensity, and the results were not reviewed prior to packaging aid. Effect – Lack of controls resulted in an overpayment of Pell award to both students. The engagement team notes that for these exceptions, the College appropriately updated the file and corrected student aid. The engagement team further notes this only affected students in a current enrollment period in which all funds for the term had not been drawn from the Department of Education. Questioned Costs – The total of all overpayments was $7,821 amount was deemed not material to compliance. Recommendation – We recommend that adequate controls be put in place to review that files are updated by semester and that clock-to-credit hour conversions are reviewed prior to awarding of federal aid. Management’s Response – The College will strengthen the controls in place to ensure that all procedures have been followed prior to calculation and disbursement of financial aid.

Corrective Action Plan

1. Immediate System Correction The clock-to-credit hour conversion file in Banner (GTVSDAX) was reviewed and updated to include all applicable course prefixes, including MAH and PSY. This correction ensured that clock-to-credit hour conversions were calculated accurately for affected technical programs. 2. Identification and Review of Impacted Students Financial Aid reviewed all students enrolled in the affected term (202610) and identified those whose federal aid hours had been overstated due to the conversion omission. 3. Correction of Federal Aid Awards Federal aid awards were recalculated for impacted students. The engagement team noted, and the College confirms, that all affected students were enrolled in a current payment period for which funds had not yet been fully drawn, allowing corrections to be made timely. 4. Resolution of Financial Impact Where recalculations resulted in reduced eligibility, institutional need-based funds were applied to affected student accounts to prevent students from incurring balances due to an internal administrative error. This ensured students were not financially penalized for the control deficiency. Preventive Actions and Controls to Avoid Recurrence To address the identified control deficiency and strengthen internal controls over clock-to-credit hour conversions, the College has implemented the following preventive measures: 1. Enhanced Curriculum Oversight The Registrar (Tara Dumas) and Director of Financial Aid (Stacia Richerson) now serve as standing members of the Academic/Curriculum Review Committee. This ensures that Financial Aid and Registrar review all proposed curriculum changes, including: o New courses o New course prefixes o Courses designated as “in degree plan” for technical or clock-hour programs This review occurs prior to course approval and implementation, allowing clock-to-credit hour implications to be addressed in advance. 2. Formal Notification and Review Process Academic Affairs will notify Financial Aid of any curriculum changes that may impact clock-to-credit hour conversions. Financial Aid will review and update Banner conversion tables as needed before federal aid calculations occur. 3. Assigned Responsibility and Monitoring Responsibility for maintaining and reviewing clock-to-credit hour conversion tables has been formally assigned to the Director of Financial Aid (Stacia Richerson). o Conversion tables will be reviewed each semester prior to awarding federal aid. o Discrepancies in ROAENRL will be reviewed promptly to ensure accuracy. 4. Ongoing Compliance Review The College will perform periodic reviews of conversion logic and awarding calculations to ensure continued compliance with federal regulations and internal control standards under 2 CFR 200.303. Conclusion Reid State Technical College has corrected the clock-to-credit hour conversion issue, resolved the related questioned costs, and implemented strengthened internal controls. The addition of the Registrar (Tara Dumas) and Director of Financial Aid (Stacia Richerson) to the Academic/Curriculum Review Committee, combined with formalized review and notification procedures, provides reasonable assurance that clock-to-credit hour conversions will be accurately applied prior to federal aid calculation and disbursement.

Categories

Matching / Level of Effort / Earmarking Student Financial Aid Eligibility

Programs in Audit

ALN Program Name Expenditures
84.063 FEDERAL PELL GRANT PROGRAM $2.32M
17.280 WIOA DISLOCATED WORKER NATIONAL RESERVE DEMONSTRATION GRANTS $217,314
90.200 DELTA REGIONAL AUTHORITY $189,599
84.048A CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $180,824
17.258 WIOA ADULT PROGRAM $174,322
17.259 WIOA YOUTH ACTIVITIES $169,444
94.006 AMERICORPS STATE AND NATIONAL $82,739
84.002 ADULT EDUCATION - BASIC GRANTS TO STATES $78,112
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $69,092
16.710 PUBLIC SAFETY PARTNERSHIP AND COMMUNITY POLICING GRANTS $62,058
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $15,888
84.033 FEDERAL WORK-STUDY PROGRAM $15,408