Finding 1216424 (2025-004)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
-
Year
2025
Accepted
2026-06-03
Audit: 402942
Organization: Richland Community College (IL)
Auditor: SIKICH CPA LLC

AI Summary

  • Core Issue: The College delayed drawing federal direct funds from the Department of Education, leading to noncompliance with reconciliation requirements.
  • Impacted Requirements: Internal and external reconciliation processes were not properly followed, affecting the accuracy of financial records.
  • Recommended Follow-Up: Establish clear procedures for timely fund drawdowns and reconciliation to comply with federal regulations.

Finding Text

2025-004 - Student Financial Aid Cluster - (a) Federal Supplemental Educational Opportunity Grants (b) Federal Work Study Program (c) Federal Pell Grant Program (d) Federal Direct Student Loans, Assistance Listing No. (a) 84.007 (b) 84.033 (c) 84.063 (d) 84.268 - Year Ended June 30, 2025 Criteria: A school performs internal reconciliation when it compares business office records of funds requested, received, disbursed, and returned to financial aid office records of funds awarded to students. When the school compares its reconciled internal records to the Department’s records of funds received and returned, and of grants or loans originated and disbursed to students at the school, it is performing external reconciliation. A school ensures that the Department’s records reconcile with the school’s records, both at the cumulative and individual student levels, when it performs external reconciliation. (34 CFR 668.166) Condition: The College disbursed funds to students during the appropriate semesters in a timely manner, however, did not draw the federal direct funds down from the Department of Education until September 2024 and January 2025, outside of the award period for the disbursed award year of 2023-2024. We consider this finding an instance of noncompliance and is a repeated finding shown in Section IV of this report as prior year finding 2024-006. Statistical sampling was not used in making sample selections. Questioned Costs: N/A Cause: The Institution had significant staff turnover, which impacted proper timing for drawdowns. Effect: The College was unable to properly reconcile on a monthly basis as funds posted to student ledgers are not drawn down from the Department of Education until months after disbursement. This may lead to inconsistencies between school records and the Department of Education within the Common Origination and Disbursement (COD) system. Recommendation: Sikich recommends the College create standards of procedures to disburse the appropriate student eligible Federal Direct program amounts following heightened cash monitoring rules, and once applied request the drawdown within a set number of days to ensure proper reconciliation. View of Responsible Officials: Management agrees with this Single Audit Finding and a response is included in the Corrective Action Plan.

Corrective Action Plan

2025-004 - Student Financial Aid Cluster - (a) Federal Supplemental Educational Opportunity Grants (b) Federal Work Study Program (c) Federal Pell Grant Program (d) Federal Direct Student Loans, Assistance Listing No. (a) 84.007 (b) 84.033 (c) 84.063 (d) 84.268 - Year Ended June 30, 2025 Criteria: A school performs internal reconciliation when it compares business office records of funds requested, received, disbursed, and returned to financial aid office records of funds awarded to students. When the school compares its reconciled internal records to the Department’s records of funds received and returned, and of grants or loans originated and disbursed to students at the school, it is performing external reconciliation. A school ensures that the Department’s records reconcile with the school’s records, both at the cumulative and individual student levels, when it performs external reconciliation. (34 CFR 668.166) Condition: The College disbursed funds to students during the appropriate semesters in a timely manner, however, did not draw the federal direct funds down from the Department of Education until September 2024 and January 2025, outside of the award period for the disbursed award year of 2023-2024. We consider this finding an instance of noncompliance and is a repeated finding shown in Section IV of this report as prior year finding 2024-006. Statistical sampling was not used in making sample selections. Responsible Person: Director of Financial Aid and Veteran Affairs, Controller, and Vice President of Financial Services Corrective Action Plan: Around Census date and Pell Disbursement dates, the responsible parties will verify the amount of Federal dollars to be drawn down using the U.S. Department of Education Common Origination & Disbursement webpage. The draw down will occur within a seven-day period of the disbursement date. Implementation Date: February 2026

Categories

Student Financial Aid

Other Findings in this Audit

  • 1216417 2025-003
    Material Weakness Repeat
  • 1216418 2025-003
    Material Weakness Repeat
  • 1216419 2025-003
    Material Weakness Repeat
  • 1216420 2025-003
    Material Weakness Repeat
  • 1216421 2025-004
    Material Weakness Repeat
  • 1216422 2025-004
    Material Weakness Repeat
  • 1216423 2025-004
    Material Weakness Repeat
  • 1216425 2025-005
    Material Weakness Repeat
  • 1216426 2025-005
    Material Weakness Repeat
  • 1216427 2025-005
    Material Weakness Repeat
  • 1216428 2025-005
    Material Weakness Repeat
  • 1216429 2025-006
    Material Weakness Repeat
  • 1216430 2025-006
    Material Weakness Repeat
  • 1216431 2025-006
    Material Weakness Repeat
  • 1216432 2025-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.063 FEDERAL PELL GRANT PROGRAM $3.89M
84.268 FEDERAL DIRECT STUDENT LOANS $734,916
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $72,900
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $61,595
84.033 FEDERAL WORK-STUDY PROGRAM $42,472
84.002 ADULT EDUCATION - BASIC GRANTS TO STATES $32,236
10.902 SOIL AND WATER CONSERVATION $2,549