Finding Text
Audit Finding Reference Number Questioned Cost 2024 – 005 – Verification $4,887 Federal Program and Specific Federal Award Identification ALN Title and Number 84.033 Federal Work Study Program (FWS) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR Part 200, Subpart F, Compliance Supplement, Part 5 – Student Financial Assistance Programs, Special Tests and Provisions – Verification, requires institutions participating in the Title IV programs to verify certain applicant information for students selected for verification by the U.S. Department of Education or selected by the institution. Before disbursing Title IV funds, the institution must obtain, review, and retain the documentation necessary to verify the required applicant information and resolve any conflicting information in accordance with Title IV regulations. 34 CFR §668.51–668.61 establish the federal verification requirements for applicants selected for verification. Institutions must obtain and retain documentation supporting the verification of required applicant information before disbursing Title IV assistance, except as otherwise permitted by federal regulations. Condition and Context During my audit, I noted that one (1) student out of nine (9) students selected for verification testing where ABC did not provide all documentation required to support that the student's verification was completed in accordance with federal requirements. As a result, I was unable to determine whether all required verification procedures were performed prior to the disbursement of Title IV financial assistance. Cause ABC did not establish and implement adequate internal controls to ensure that all documentation supporting the verification process was obtained, reviewed, and retained in accordance with federal requirements. Specifically, management did not maintain complete verification files to demonstrate compliance with Title IV verification requirements. Questioned Costs For purposes of this condition, I have questioned costs totaling $4,887 related to the Federal Work Study program. Effect As a result of these deficiencies, ABC was unable to demonstrate compliance with the federal verification requirements for students selected for verification. Without maintaining adequate supporting documentation, the institution cannot ensure that Title IV eligibility was properly determined prior to the disbursement of federal financial aid, increasing the risk that aid may have been awarded based on inaccurate or unverified information. Consequently, questioned costs of $4,887 were identified. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over the Title IV verification process by implementing procedures to ensure all required verification documentation is obtained, reviewed, and retained prior to disbursing Title IV financial assistance. Management should utilize Jenzabar to monitor students selected for verification, maintain complete verification files supporting all required verification procedures, and require supervisory review to verify that all required documentation has been received and eligibility has been established before aid is awarded or disbursed. Management’s Response The Institution, Arkansas Baptist College, accepts the recommendation and will continue to work and strengthen its internal controls over the verification process by implementing procedures to ensure that all required verification documentation is obtained, reviewed, and retained prior to disbursing Title IV financial assistance. Management should utilize Jenzabar to monitor students selected for verification, maintain complete verification files supporting all required verification procedures, and require an additional level review to verify the required documentation has been received and eligibility has been established before aid is awarded or disbursed.