Finding Text
Finding 2025-004 - U.S. Department of Education (ED), Student Financial Assistance Programs – Cost of Attendance Budgets (material weakness): Information on the federal program – Federal Pell Grant Program, FAL No. 84.063, June 30, 2025; Federal Supplemental Opportunity Grant Program, FAL No. 84.007, June 30, 2025; Federal Work-Study Program, FAL No. 84.033, June 30, 2025; Federal Direct Student Loan Program, FAL No. 84.268, June 30, 2025; Federal Teacher Education Assistance for College (TEACH), FAL No. 84.379, June 30, 2025 Criteria – Institutions must determine a student’s financial need by subtracting the student aid index (expected family contribution) and estimated financial assistance from the cost of attendance. 34 CFR 668.2 and 34 CFR 637.5(a). Condition – The College did not provide Cost of Attendance (COA) budgets to determine students’ unmet need. Cause – The condition occurred because the College lacked adequate internal controls and documented procedures to ensure that COA budgets were consistently established, retained, and applied during financial aid packaging. Effect – There is a risk of over-awards or improper disbursements of federal funds to ineligible students which could result in repayment liabilities. Questioned Costs – Unknown. Perspective – This is considered a systemic problem since the College was unable to produce the COA budget for the academic year. We observed the following conditions in connection with our testing of the various U.S. Department of Education, Student Financial Assistance Programs. Sixty (60) out of 60 students tested for cost of attendance budgets couldn’t be verified. Repeat Finding – Yes. Auditor's Recommendation – Internal controls should be strengthened or implemented to ensure a COA budget is established annually and need is calculated for each student to avoid noncompliance with federal regulations. A periodic review of the COA budget should be done to verify. Management’s Response – The College concurs with this finding. We acknowledge that the absence of documented Cost of Attendance (COA) budgets and the resulting inability to verify financial need calculations constitute a significant breakdown in internal controls. The College is committed to immediate remediation to ensure full compliance with Title IV regulations. To address the root causes of this finding, the College will implement the following measures: • Establishment of Formal COA Budgets: The Financial Aid Office will immediately develop and document standardized COA budgets for the 2025-2026 academic year. These budgets will account for all required components (tuition, fees, housing, food, books, supplies, transportation, and personal expenses) as required by 34 CFR 668.2. • System Integration: We will update our Student Information System (SIS) to automate the application of these COA budgets to student records, ensuring that "Unmet Need" is calculated electronically and consistently for every applicant. • Formalized Internal Controls: A new Standard Operating Procedure (SOP) manual for Financial Aid Packaging will be authored and implemented by June 1, 2026. This manual will mandate the retention of COA tables used for each award year to provide a clear audit trail. • Enhanced Oversight and Training: The Vice President for Enrollment Management and Student Services will initiate a mandatory training program for all financial aid staff regarding federal packaging requirements. • Internal Quality Assurance (IQA): Beginning April 15, 2026 the College will implement a monthly "Mini-Audit" process where a random sample of 10% of student files is reviewed by a third-party or a non-conflicted administrator to verify COA accuracy before disbursements are finalized. Designated Responsible Party-Director of Financial Aid. Anticipated Completion Date-June 30, 2026 View of Responsible Officials – The College agrees with the finding.