Finding Text
Finding 2025 - 001 - U.S. Department of Education (USD), Title IV Student Financial Aid Programs (material weakness): Information on the federal program – (Federal Award Identification): – 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 expected family contribution and estimated financial assistance from the cost of attendance. 34 CFR 668.2 and 34 CFR 637.5(a). Condition – The Cost of Attendance (COA) budgets provided by the College to determine students’ unmet need were unverifiable. Cause – The condition occurred because the College lacked adequate internal controls and documentation procedures to ensure that COA budgets were consistently established, retained, and applied during financial aid packaging. Effect – There is a risk of overawards or improper disbursements of federal funds to ineligible students which could result in repayment liabilities. Questioned Costs – Unknown Auditor’s Perspective – We observed the following conditions in connection with our testing of the various U.S. Department of Education, Title IV, Student Financial Assistance Programs: Per (34 CFR 685.102 (b)) Forty (40) out of 40 students tested for cost of attendance budgets used the incorrect budgets. Student COA Budgets Not Matching information provided due to overstated / understated budgets (Transportation Costs, Housing Costs, Summer Tuition Costs and Room & Board Charges). Budgets not adjusted based on enrollment status (Full Time, Part Time, Half Time or Less Than Half Time) for Fall, Spring or Summer periods. Repeat Finding – No Auditor's Recommendation – The College should implement corrective actions to ensure that the above findings are resolved and do not recur in future periods. Moreover, internal controls over compliance with federal program regulations should be revisited to ensure adequate supervisory controls, quality assurance reviews of processes, and policies and procedures are being updated and adhered to for compliance purposes. A periodic review of the COA budget should be done to verify. View of Responsible Officials – The College has engaged a financial aid consultant to support the development of cost-of-attendance budgets and ensure they align with industry best practices, thereby making improvements to the College's financial aid operating system. After evaluating the auditors' sample of forty students, the College confirmed that no instances of over/under awarding occurred. There were clarifications and changes made to the initial cost of attendance budgets provided to the auditors that led to the questioned cost. The College will implement ongoing monitoring each semester to further enhance operational efficiency and effectiveness. The cost of attendance budgets have been uploaded into the College’s financial aid system to prevent the recurrence of this issue for the current and future years.