Finding 1186642 (2025-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-03-25
Audit: 394339
Organization: Sterling College (KS)

AI Summary

  • Core Issue: The College reported an incorrect disbursement date to the Common Origination and Disbursement system (COD) for one student.
  • Impacted Requirements: Compliance with 34 CFR 690.83, which mandates accurate reporting of financial aid disbursements.
  • Recommended Follow-Up: Enhance internal controls to ensure thorough reviews of disbursement data for accuracy before submission to COD.

Finding Text

Disbursements to or on Behalf of Students Type of Finding - Noncompliance with Disbursements to or on Behalf of Students compliance requirement and significant deficiency in internal control over compliance Program: Student Financial Assistance Cluster Assistance Listing Number: Federal Direct Loans 84.268 Federal Agency: U.S. Department of Education Criteria – 34 CFR 690.83 states that institutions are required to submit accurate direct loan, Pell grant, and TEACH grant disbursement records to the Common Origination and Disbursement system (COD). Condition – One student had a disbursement date on the COD of October 3, 2024 while the students account had a disbursement date of September 11, 2024. The College’s records did not match what was reported to the COD. Cause – The College’s software pulled an inaccurate date for the identified student and the date was not verified by College personnel. Internal controls over compliance should be sufficient to prevent and/or detect and correct inaccurate information on a timely basis. Effect – The disbursement date reported to the COD was inaccurate. Questioned Costs – Not Applicable. Context – Out of a sample of 40 students, one student was found to have an inaccurate date submitted to the COD. Identification as a Repeat Finding - Not Applicable. Recommendation – It is recommended that the controls surrounding information submitted to the COD be refined to include a more in depth review of information submitted for accuracy. Views of Responsible Official – Management concurs with the finding and is providing those responsible for compliance with appropriate education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis.

Corrective Action Plan

Contact person responsible for correction action – Mitzi Suhler, Financial Aid Director Anticipated completion date – June 30, 2025 Corrective action Sterling College agrees with the finding. At the time of this noncompliance the College was implementing a new financial aid system (JFA). The financial aid system went live in July 2024. The business office module did not go live until November 2024. The college’s IT implemented a bridge to connect the two systems while we waited for the business office module to go live. There were issues with the bridge between the two systems which caused the aid posting process to work inaccurately. We immediately contacted IT to help with the situation, but they took longer than expected to find a solution. Because we knew time was of the essence and our system would be “going dark” (unable to process anything for a period of time), we manually started processing aid in order to post aid to student accounts so that students could receive their refunds. The financial aid system had disbursement dates already set up and all of those dates had to be manually updated. Unfortunately, the College missed updating one date for the student that was found during audit, and the date that was reported to COD was the original disbursement date instead of the actual disbursement date. The system no longer requires the bridge, and we have not experienced any issues since all systems came on board. Now that the system is working properly, there is a process that looks at the disbursement date on the student account and compares it to what the financial aid system has in place. If the dates do not match, the system automatically updates the disbursement date in the financial aid system and there is a file that is generated to send an update to COD automatically. We do not expect to have this issue in the future but have implemented processes to review disbursement dates through the reconciliation process in the new system.

Categories

Student Financial Aid Significant Deficiency

Other Findings in this Audit

  • 1186641 2025-001
    Material Weakness Repeat
  • 1186643 2025-003
    Material Weakness Repeat
  • 1186644 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $4.01M
84.063 FEDERAL PELL GRANT PROGRAM $1.64M
84.038 FEDERAL PERKINS LOAN PROGRAM_FEDERAL CAPITAL CONTRIBUTIONS $115,215
84.033 FEDERAL WORK-STUDY PROGRAM $57,976
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $50,818
84.379 TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS (TEACH GRANTS) $19,803