Finding 1179944 (2025-005)

Federal Agency: US Department of Education (ED) Program Name: Student Financial Assistance Cluster: Federal Pell Grant Program ALN: 84.063 Award Numbers: P063P161370; Federal Awards Year 2024 – 2025 Questioned Costs: None Repeat Finding: No 2025-005. Finding: Errors in Verification Reporting Northern Illinois University (University) did not properly code the verification status in the Common Origination and Disbursement (COD) System for students who were disbursed Pell Grant funds and later selected for verification, and the internal controls in place did not prevent and detect the exceptions. Condition: As part of verification requirements, the University is required to obtain acceptable documentation to verify the information required for the Verification Tracking Group to which the applicant is assigned; match information on the documentation to the student aid application; if necessary, submit data corrections to the Free Application for Federal Student Aid (FAFSA) Processing System and recalculate awards and; correctly code the student’s verification status in the COD System for Pell Grants. We noted 6 (24%) of 25 students tested who had been selected for verification for which the verification status code was not correctly coded in COD after the verification procedures were completed. The sample was not intended to be, and was not, a statistically valid sample. Criteria: Under 34 CFR 668.51 – 668.61, a school is required to complete the verification of information submitted by an applicant on the FAFSA if the application has been selected for verification. When a Pell Grant is disbursed, the school must report the student’s verification status through the COD System. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure verification status codes are properly reported. Cause: University officials stated that for students who were selected for verification after disbursements were made, the University’s existing procedures did not include a process to ensure verification status changes were properly updated and transmitted to the COD System after verification was completed. Effect: If the COD System is not properly updated with verification status by the University, there could be overpayments of student aid. (Finding Code No. 2025-005) Recommendation: We recommend the University review current processes for reporting verification status to the COD System and implement procedures to ensure all verification statuses are reported. University Response: Accepted. University procedures have been updated to ensure verification status updates are properly transmitted to the COD System upon completion of verification for students who were disbursed Pell Grant funds and were later selected for verification. Relevant staff have been trained in the revised procedures. Additionally, the University implemented a process to periodically review records and confirm that verification statuses are accurately reflected in the COD System. All affected student records have been reviewed. It has been confirmed in the National Student Loan Data System (NSLDS) that none of the reported statuses resulted in overpayment.