Finding 2025-003: Inaccurate Cost of Attendance, Need Analysis, Pell Awarding, and Overall Award Determination – Significant Deficiency Federal Program: Federal Direct Student Loans [84.268], Federal Pell Grant Program [84.063], and Federal Work-Study Program [84.033] Criteria: Under 34 CFR §668.16 and program-specific regulations within the Student Financial Assistance Cluster, institutions must: Accurately determine each student’s COA in accordance with federal definitions. Calculate each student’s financial need using correct COA, EFC, and other aid. Ensure that Title IV aid does not exceed COA or financial need, as applicable. Award Pell Grants based on the student’s actual enrollment status for each payment period, in accordance with 34 CFR §690.63. Maintain documentation supporting all adjustments to COA, need, or awards. Condition: During testing of Student Financial Assistance (SFA) eligibility and awarding, the Institution did not consistently apply federal requirements related to Cost of Attendance (COA), financial need determination, and award packaging. Specifically: One student was awarded aid in excess of the federally allowable COA. One student’s COA was overstated, which resulted in the student being potentially overawarded. Six student’s were awarded the incorrect COA based on the grade level reported on the Institutional Student Information Record (ISIR). However, there is no code for year 4 on the ISIR, which resulted in the students receiving year 3 COA. Two students received aid in excess of their calculated financial need, and the Institution did not maintain documentation supporting the adjustments or exceptions. One student was enrolled at three-quarter time during the fall semester and full-time during the spring semester; however, the student received three-quarter-time Pell Grant disbursements for both semesters, resulting in an underpayment for the spring term and inaccurate Pell reporting. These errors demonstrate inconsistent application of federal awarding rules and insufficient review of eligibility and enrollment status changes. Cause: Internal controls over COA determination, need analysis, Pell awarding, and award packaging were not operating effectively. Review procedures did not detect errors in COA inputs, enrollment status updates, need calculations, or Pell disbursement amounts. Documentation requirements were not consistently followed. Effect: Students received award amounts that were not compliant with federal requirements. Errors resulted in both overawards and underawards, inaccurate Pell reporting, and increased risk of improper payments. Questioned Costs: $13,205 Context: Errors occurred across multiple students and multiple components of the awarding process, indicating a systemic weakness in the Institution’s controls over eligibility, enrollment status monitoring, and award determination. Repeat Finding: This is not repeat finding. Recommendation: The Institution should strengthen internal controls over COA determination, need analysis, Pell awarding, and award packaging. Improvements should include: Implementing a secondary review of COA inputs, need calculations, and Pell enrollment status determinations. Ensuring timely updates to enrollment status and corresponding Pell recalculations. Maintaining documentation supporting all award adjustments. Providing refresher training to financial aid staff on federal awarding requirements. Management Response: To strengthen internal controls, the Academy will implement enhanced review procedures for financial aid packaging, Cost of Attendance determinations, financial need calculations, enrollment status changes, and Pell Grant disbursements prior to disbursement. In addition, financial aid personnel will receive refresher training on federal awarding requirements, documentation standards, and exception processing. Management believes these corrective actions will improve compliance with federal regulations and reduce the likelihood of similar errors in future award years.