FAC Explorer

Finding 1216672 (2023-015)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2026-06-04
Audit: 403112
Organization: College of the Marshall Islands (MH)
Auditor: ERNST & YOUNG LLP

AI Summary

  • Core Issue: The College's verification policies for FAFSA information are incomplete, leading to noncompliance with federal regulations.
  • Impacted Requirements: Key verification criteria from 34 CFR 668.53 and 668.54(a) were not fully met, resulting in discrepancies in 18% of tested cases.
  • Recommended Follow-Up: Management should enhance internal controls and procedures to ensure compliance with federal verification requirements.

Finding Text

Finding No.: 2023-015 Federal Agency: U.S. Department of Education AL Program: 84.063 Federal Pell Grant Program Federal Award No.: P063P214572, P063P224572, P063P234572 Area: Special Tests and Provisions - Verification Questioned Costs: $8,619 Criteria: 34 CFR 668.53 states that: (a) An institution must establish and use written policies and procedures for verifying an applicant’s Free Application for Federal Student Aid (FAFSA) information in accordance with the provisions of this subpart. These policies and procedures must include: (1) The time period within which an applicant must provide any documentation requested by the institution in accordance with 34 CFR 668.57; (2) The consequences of an applicant’s failure to provide the requested documentation within the specified time period; (3) The method by which the institution notifies an applicant of the results of its verification if, as a result of verification, the applicant’s Expected Family Contribution (EFC) changes and results in a change in the amount of the applicant’s assistance under the title IV, HEA programs; (4) The procedures the institution will follow itself or the procedures the institution will require an applicant to follow to correct FAFSA information determined to be in error; and (5) The procedures for making referrals under 34 CFR 668.16(g). (b) An institution’s procedures must provide that it will furnish, in a timely manner, to each applicant whose FAFSA information is selected for verification a clear explanation of: (1) The documentation needed to satisfy the verification requirements; and (2) The applicant’s responsibilities with respect to the verification of FAFSA information, including the deadlines for completing any actions required under this subpart and the consequences of failing to complete any required action. (c) An institution’s procedures must provide that an applicant whose FAFSA information is selected for verification is required to complete verification before the institution exercises any authority under section 479A(a) of the HEA to make changes to the applicant’s cost of attendance or to the values of the data items required to calculate the EFC. 34 CFR 668.54(a); FSA Handbook Application and Verification Guide, Chapter 4 requires an institution to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. Institutions shall require each applicant whose application is selected by ED to verify information required for the Verification Tracking Group to which the applicant is assigned. Conditions: 1. The College’s policies and procedures for verifying an applicant’s FAFSA information do not include all of the requirements identified in the Criteria above. 2. For 2 (or 18%) of 11 participants tested, discrepancies in the information were found between the supporting documents and related verification worksheet provided against the information reflected in the student’s Institutional Student Information Record (ISIR). Cause: The College did not effectively monitor compliance with applicable verification requirements. Effect: The College is in noncompliance with applicable special tests and provisions for verification requirements. The reportable questioned cost is $8,619 based on the items identified in Conditions above. Recommendation: College management should establish and strengthen internal control policies and procedures over compliance with applicable federal regulations on verification requirements. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan .

Corrective Action Plan

Special Tests and Provisions – Verification The College agrees with the finding and acknowledges that the Financial Aid Office policies and procedures related to FAFSA verification did not fully incorporate all required federal verification provisions during the audit period and that discrepancies existed between supporting verification document, verification worksheets, and certain students’ ISIR. Corrective actions have already been implemented. The College reviewed and updated the FAO verification policies and procedures to incorporate applicable federal verification requirements, including verification deadlines, required documentation, correction procedures, conflicting information resolution, applicant responsibilities, and the requirement that verification must be completed prior to professional judgement adjustments in accordance with federal regulations and FSA Handbook requirements. In addition, the College strengthened its verification review, document collection, and conflicting resolution procedures to improve the accuracy of Title IV eligibility determinations and related reporting. The implementation of Jenzabar Financial Aid (JFA) system has also improved the FAO’s ability to track, organize, and monitor verification documents and related processing activities. The College will continue monitoring these procedures to ensure ongoing compliance with federal verification requirements.

Categories

Student Financial Aid Special Tests & Provisions

Other Findings in this Audit

  • 1216657 2023-005
    Material Weakness Repeat
  • 1216658 2023-006
    Material Weakness Repeat
  • 1216659 2023-007
    Material Weakness Repeat
  • 1216660 2023-008
    Material Weakness Repeat
  • 1216661 2023-009
    Material Weakness Repeat
  • 1216662 2023-009
    Material Weakness Repeat
  • 1216663 2023-010
    Material Weakness Repeat
  • 1216664 2023-010
    Material Weakness Repeat
  • 1216665 2023-010
    Material Weakness Repeat
  • 1216666 2023-011
    Material Weakness Repeat
  • 1216667 2023-012
    Material Weakness Repeat
  • 1216668 2023-012
    Material Weakness Repeat
  • 1216669 2023-012
    Material Weakness Repeat
  • 1216670 2023-013
    Material Weakness Repeat
  • 1216671 2023-014
    Material Weakness Repeat
  • 1216673 2023-016
    Material Weakness Repeat
  • 1216674 2023-017
    Material Weakness Repeat
  • 1216675 2023-018
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.063 FEDERAL PELL GRANT PROGRAM $7.12M
15.875 ECONOMIC, SOCIAL, AND POLITICAL DEVELOPMENT OF THE TERRITORIES $2.00M
84.425 EDUCATION STABILIZATION FUND $279,969
84.047 TRIO UPWARD BOUND $236,965
11.028 CONNECTING MINORITY COMMUNITIES PILOT PROGRAM $133,427
93.107 AREA HEALTH EDUCATION CENTERS $94,309
10.308 RESIDENT INSTRUCTION, AGRICULTURE, AND FOOD SCIENCE FACILITIES AND EQUIPMENT GRANTS $63,681
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $20,517