Finding Text
Finding 2024-005 - U.S. Department of Education (Title IV Student Financial Aid Programs - Unreconciled Expenditures Reported on the FISAP (material weakness): Information on the federal program – Federal Direct Student Loans, FAL No. 84.268, June 30, 2024; Federal Pell Grant Program, FAL No. 84. 063, June 30, 2024; Federal Supplemental Educational Opportunity Grant, FAL No. 84.007, June 30, 2024; Federal Work-Study Program, FAL No. 84.033, June 30, 2024. Criteria – Per 34 CFR § 668.24 (a), institutions must maintain records necessary to demonstrate compliance with the requirements of Title IV programs, including records that support the accuracy of disbursements and fiscal transactions. Per the Federal Student Aid Handbook, Volume 4 – Processing Aid and Managing Funds, institutions are required to reconcile internal disbursement and expenditure records with the Business Office, general ledger, and the Department of Education’s systems on a monthly basis for all Title IV programs prior to completing year-end federal reporting including the FISAP. Condition – The Office of Financial Aid submitted unreconciled expenditure amounts in the institution’s Fiscal Operations Report and Application to Participate (FISAP). At the time of audit, the reported FISAP totals did not reconcile to the applicable federal systems (COD) or to the Student Financial Aid (SFA) reconciliation report. No documentation was provided to demonstrate that final reconciliations were completed prior to submission of the FISAP. Cause – The lack of reconciliation appears to have resulted from insufficient coordination and reconciliation timeliness between the Office of Financial Aid and the Business Office Effect - Failure to reconcile may impact the University’s administrative capability under 34 CFR § 668.16, exposing the College to regulatory review, questioned costs, and potential repayment liability. The accuracy and reliability of the FISAP submission cannot be assured. Questioned Costs - $0 Perspective – The FISAP serves as a primary financial reporting tool used by the Department of Education to determine campus-based program funding and institutional compliance. Submitting unreconciled figures undermines the integrity of federal reporting and represents a systemic breakdown in financial oversight rather than an isolated reporting error. The Office of Financial Aid submitted unreconciled expenditures within the Fiscal Operations Report and Application to Participate (FISAP) for the programs below: a. Federal Pell Grant Program b. Federal Work Study (FWS) Program Repeat Finding - Yes Auditor’s Recommendation - The University should implement monthly reconciliations, strengthen cross-department coordination, perform year-end reconciliation prior to FISAP submission. Implementation of these measures will strengthen financial accountability, improve federal reporting accuracy, and reduce the likelihood of future findings. Management’s Response – To address this finding and prevent recurrence, the University has strengthened its reconciliation and reporting processes by implementing mandatory monthly reconciliations for all Title IV programs and requiring completion of a documented year-end reconciliation prior to submission of the FISAP. The Office of Financial Aid now utilizes standardized reconciliation templates and documentation procedures and coordinates closely with the Business Office to ensure reported expenditures reconcile to internal records, the general ledger, and federal systems. In addition, supervisory review has been incorporated into the reconciliation and FISAP preparation process to verify accuracy, resolve discrepancies timely, and ensure federal reporting is complete, accurate, and supported by reconciliation documentation. View of Responsible Officials – Management agrees with the finding and acknowledges the submission of unreconciled expenditure data within the Fiscal Operations Report and Application to Participate (FISAP). Management concurs that all Title IV expenditures must be fully reconciled to internal records, federal systems, and the general ledger prior to year-end federal reporting to ensure accuracy and compliance with federal requirements.