Finding 1177956 (2025-001)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2026-03-11
Audit: 391374
Organization: Morehouse College (GA)
Auditor: KPMG LLP

AI Summary

  • Core Issue: A misunderstanding led to an incorrect increase in the cost of attendance for a student receiving Federal Work Study funding.
  • Impacted Requirements: Compliance with eligibility criteria under 34 CFR §675.9 and financial need assessment as per the Higher Education Act.
  • Recommended Follow-Up: The College should revise its cost assessment process for Federal Work Study students to ensure alignment with federal financial need requirements.

Finding Text

Eligibility Federal Program Student Financial Assistance Cluster Assistance Listing Number 84.033 Federal Work StudyFederal Agency U.S. Department of Education Federal Award Years July 1, 2024 to June 30, 2025 Criteria or Requirement CFR §675.9 provides student eligibility requirements, stating that a student at an institution of higher education is eligible to receive part-time employment under the Federal Work Study (FWS) program for an award year if the student (a) meets the relevant eligibility requirements contained in 34 CFR 668.32; (b) is enrolled or accepted for enrollment as an undergraduate, graduate or professional student at the institution; and (c) has financial need as determined in accordance with part F of title IV of the HEA. The financial need determination relies upon the assessment of a cost of attendance which is established under the Higher Education Act, Section 472. Condition and Context During our test work over eligibility for 40 students with total aid received from the student financial assistance cluster of $1,250,644, we selected a student receiving FWS funding for whom the cost of attendance had been increased due to the student’s involvement in the FWS program by $2,810. While the cost of attendance should not have been increased for this purpose, the student did not receive aid in excess of their financial need as a result of this increase in cost of attendance. Cause and Potential Effect The cost of attendance was increased as a result of a misunderstanding related to certain guidance relevant only to the Federal Work Study program. Questioned Cost There are no known questioned cost associated with the finding. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding is a Repeat Finding in the Immediately Prior Audit This is not a repeat finding in the immediately prior year audit. Recommendation We recommend that the College reconsider their process related to the assessment of cost of attendance for students receiving Federal Work Study funding to ensure each student has financial need as determined in accordance with part F of title IV of the HEA.View of Responsible Officials Management agrees with the finding. To address the finding and ensure compliance with federal regulations governing the Federal Work Study program, the Office of Financial Aid will clarify the policy and adjust the award process to ensure that aid adjustments remain compliant with federal need-analysis requirements.

Corrective Action Plan

Corrective Action Plan Finding No. 2025-001 – Eligibility (Federal Work Study Program) Federal Program: Student Financial Assistance Cluster – Federal Work Study (ALN 84.033) Federal Agency: U.S. Department of Education Audit Period: July 1, 2024 – June 30, 2025 Finding Summary During testing of student eligibility, auditors identified one instance in which a student’s Cost of Attendance (COA) was increased by $2,810 due to participation in the Federal Work Study (FWS) program. Federal regulations do not permit an institution to increase COA solely to accommodate FWS eligibility. Although the adjustment did not result in the student receiving aid exceeding financial need, the adjustment occurred due to a misunderstanding of guidance related to the FWS program. Corrective Action Plan Management agrees with the finding. To address the finding and ensure compliance with federal regulations governing the Federal Work Study program, the Office of Financial Aid will implement the following corrective actions: 1. Policy Clarification and Documentation The Office of Financial Aid will revise its internal awarding policies and procedures to clearly state that the standard practice of awarding Federal Work Study funds must fit within the student established Cost of Attendance (COA). Additionally, the revised policy will explicitly include flexibility to increase the Cost of Attendance only because of approved Special Circumstance appeals, consistent with federal guidance and institutional professional judgment policies. Federal Student Aid Handbook: Application and Verification Guide: Chapter 5 – Special Cases 2. Award Adjustment Procedures When a student’s aid package exceeds need due to the addition of FWS, staff will take the following steps: • Reduction of loan awards, when applicable, to allow FWS funding to be added within the student’s financial need limits.A Loan Adjustment Form will be required for all downward adjustments to loan awards to ensure documentation and transparency. These procedures will ensure that aid adjustments remain compliant with federal need-analysis requirements. Implementation Timeline • Policy updates and procedural documentation: Within 60 days • Process implementation: Beginning with the 2026-2027 academic year packaging cycle

Categories

Student Financial Aid Eligibility

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $39.61M
84.063 Federal Pell Grant Program $9.05M
84.031 Strengthening Historically Black Colleges and Universities $3.78M
93.456 CDC UNDERGRADUATE PUBLIC HEALTH SCHOLARS PROGRAM (CUPS): A PUBLIC HEALTH EXPERIENCE TO EXPOSE UNDERGRADUATES INTERESTED IN MINORITY HEALTH TO PUBLIC HEALTH AND THE PUBLIC HEALTH PROFESSIONS $659,295
84.044 TRIO TALENT SEARCH $539,542
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $473,084
84.116 FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION $395,492
47.083 INTEGRATIVE ACTIVITIES $383,661
84.047 TRIO UPWARD BOUND $360,258
16.753 CONGRESSIONALLY RECOMMENDED AWARDS $279,250
84.038 FEDERAL PERKINS LOAN PROGRAM_FEDERAL CAPITAL CONTRIBUTIONS $273,529
84.217 TRIO MCNAIR POST-BACCALAUREATE ACHIEVEMENT $267,885
84.033 FEDERAL WORK-STUDY PROGRAM $247,079
47.070 COMPUTER AND INFORMATION SCIENCE AND ENGINEERING $227,381
59.037 SMALL BUSINESS DEVELOPMENT CENTERS $158,808
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN $131,939
84.428 Black Male Educators $103,698
81.U01 National Nuclear Security Administration Minority Serving Institutions Program $100,583
81.049 OFFICE OF SCIENCE FINANCIAL ASSISTANCE PROGRAM $72,147
19.025 U.S. AMBASSADORS FUND FOR CULTURAL PRESERVATION $68,972
11.028 CONNECTING MINORITY COMMUNITIES PILOT PROGRAM $57,707
43.008 OFFICE OF STEM ENGAGEMENT (OSTEM) $45,178
12.598 CENTERS FOR ACADEMIC EXCELLENCE $43,476
47.074 BIOLOGICAL SCIENCES $39,892
93.866 Biomedical Research and Research Training $36,423
47.084 NSF TECHNOLOGY, INNOVATION, AND PARTNERSHIPS $29,921
47.041 ENGINEERING $29,553
84.411 EDUCATION INNOVATION AND RESEARCH (FORMERLY INVESTING IN INNOVATION (I3) FUND) $24,753
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $18,963
11.802 MINORITY BUSINESS RESOURCE DEVELOPMENT $12,425
81.123 NATIONAL NUCLEAR SECURITY ADMINISTRATION (NNSA) MINORITY SERVING INSTITUTIONS (MSI) PROGRAM $6,694
47.049 MATHEMATICAL AND PHYSICAL SCIENCES $6,549
15.904 HISTORIC PRESERVATION FUND GRANTS-IN-AID $4