Finding Text
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: September 1, 2024 to August 31, 2025 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: Uniform Guidance (2 CFR 200) requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the award. This includes documented control activities such as approvals, reviews, reconciliations, and monitoring procedures. Condition: During our testing of internal controls over compliance, we identified that the District did not consistently implement or document key control activities related to its monthly reconciliations for Pell, Direct Loans, SEOG, and FWS. Questioned Costs: None Context: During our audit, we evaluated the design and operating effectiveness of the District’s internal controls over compliance and noted controls were not implemented consistently or lacked sufficient documentation to demonstrate compliance. Cause: The deficiencies appear to result from insufficient oversight and a lack of formalized procedures to ensure that internal control activities are consistently executed and documented. Effect or Potential Effect of Finding: Without effective internal controls over compliance, the entity is at increased risk of: • Noncompliance with federal requirements • Improper or unallowable costs being charged to federal programs • Reduced accountability over federal funds • Potential questioned costs or future restrictions on federal funding Repeat Finding: No. Recommendation: We recommend that management: • Strengthen and formalize internal control procedures over federal awards, including documented reviews, approvals, and reconciliations. • Provide training to staff responsible for federal program administration to ensure understanding of Uniform Guidance requirements. • Establish periodic internal reviews to verify that control activities are consistently performed and documented. Views of Responsible Officials: There is no disagreement with the audit finding.