Finding 1221732 (2025-006)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
-
Year
2025
Accepted
2026-06-30
Audit: 405985
Organization: Newberry College (SC)
Auditor: CAPINCROUSE LLC

AI Summary

  • Core Issue: The College lacked proper audit support for cash drawn from G5, failing to show timely disbursement to students.
  • Impacted Requirements: Non-compliance with 34 CFR 668.162(c)(3) regarding timely disbursement of Federal Direct Loans and Pell Grants.
  • Recommended Follow-Up: Implement a system using student rosters for drawdown amounts and conduct reviews prior to drawdowns to ensure compliance.

Finding Text

Cash Management Drawdowns from G5 Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268—Federal Direct Student Loans and 84.063—Federal Pell Grant Program Federal Award Identification #: 2024-2025 Financial Aid Year Condition: The College did not maintain audit support for the amounts drawn down from G5. Criteria: 34 CFR 668.162(c)(3) Questioned Costs: $0 Context: The College was unable to provide student rosters for the amounts drawn down for Federal Direct Loans and Pell Grants to show that amounts were disbursed to students in a timely manner from when the funds were drawn. The College did complete reconciliations between their student accounts and G5 at the end of each term to ensure there was no excess cash on hand. However, we could not determine if funds were disbursed to students within 3 days as required. Cause: Due to turnover at the College, they could not provide audit support for how the amounts were determined to be drawn down. Effect: The College may have inadvertently drawn more funds than they were eligible for. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the College use student rosters to determine draw down amounts and that these rosters be reviewed before draw downs are made. This will allow the College to ensure that they are disbursing aid to students timely and that any excess cash on hand is identified timely and returned to the Department of Education timely. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Corrective Action Plan

Cash Management Drawdowns from G5 Planned Corrective Action: Management acknowledges the audit finding regarding the inability to provide documentation demonstrating that Federal Direct Loan and Pell Grant funds were disbursed to students within the required timeframe following drawdown. While the College performed end-of-term reconciliations between student accounts and G5 to ensure no excess cash was maintained, documentation supporting timely disbursement at the student level was not consistently retained. Under the leadership of the Assistant Vice President (AVP) for Financial Aid and the AVP for Finance, the College has implemented a revised operating procedure to track cash management drawdowns on a student-by-student basis. A shared tracking workbook is now used by both offices to coordinate drawdowns and monitor the timing of disbursements. This enhanced process provides improved documentation and oversight to ensure compliance with federal requirements, including the timely disbursement of funds. Person Responsible for Corrective Action Plan: Missy Perry, AVP for Financial Aid, Landee Buzhardt, Director of Student Accounts, and Carrie Morris, AVP for Finance Anticipated Date of Completion: Completed.

Categories

Cash Management Student Financial Aid

Other Findings in this Audit

  • 1221725 2025-003
    Material Weakness Repeat
  • 1221726 2025-003
    Material Weakness Repeat
  • 1221727 2025-004
    Material Weakness Repeat
  • 1221728 2025-004
    Material Weakness Repeat
  • 1221729 2025-005
    Material Weakness Repeat
  • 1221730 2025-005
    Material Weakness Repeat
  • 1221731 2025-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.766 COMMUNITY FACILITIES LOANS AND GRANTS $29.97M
84.268 FEDERAL DIRECT STUDENT LOANS $11.54M
84.063 FEDERAL PELL GRANT PROGRAM $5.60M
84.116 FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION $503,965
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $116,601
84.033 FEDERAL WORK-STUDY PROGRAM $97,788
84.379 TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS (TEACH GRANTS) $15,088