Finding Text
Audit Finding Reference Number Questioned Costs 2024 – 007 – Satisfactory Academic Progress $118,387 Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loan (Direct) 84.007 Federal Supplemental Educational Opportunity Grants (SEOG) 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 Title IV regulations, 34 CFR §668.32 (f) stipulates that students participating in the Title IV Federal Financial Aid program must be maintaining satisfactory progress in the course of study he or she is pursuing, according to the standards and practices of that institution to receive student financial aid. OMB 2 CFR 200, Subpart F Compliance Supplement, Part 5 Appendix A, Student Financial Assistance – Special Tests and Provisions Compliance Requirement Number 9 – Satisfactory Academic Progress stipulates that a student must maintain good standing, or satisfactory progress. Title IV regulations CFR §668.16 (e) stipulates that an institution must establish, publish and apply reasonable standards for measuring satisfactory academic progress. Condition and Context During my audit, I noted that twelve (12) of the eighty-seven (87) students tested were awarded and received Title IV financial assistance even though they did not meet ABC's published satisfactory academic progress standards. In addition, ABC did not maintain approved satisfactory academic progress appeal documentation to support the students' continued eligibility to receive Title IV financial assistance. Cause ABC did not establish and implement adequate internal controls to ensure students' satisfactory academic progress was evaluated in accordance with institutional policy and federal regulations prior to awarding and disbursing Title IV financial assistance. Specifically, management did not ensure that students who failed to meet satisfactory academic progress standards either had an approved and adequately documented satisfactory academic progress appeal on file or were determined to be eligible before Title IV funds were disbursed. Questioned Costs For the purpose of this condition, I have questioned costs totaling $118,387 as follows: Program Amount Federal PELL $ 59,584 Federal SEOG 6,500 Federal Work Study 1,400 Federal Direct Loan 50,903 Total $118,387 Effect As a result of these deficiencies, Title IV financial assistance was awarded and disbursed to students who did not meet ABC's satisfactory academic progress standards and did not have sufficient documentation supporting continued eligibility through the satisfactory academic progress appeal process. Consequently, the institution did not demonstrate compliance with federal eligibility requirements, resulting in questioned costs of $118,387 and increasing the risk that Title IV funds were awarded to ineligible students. Repeat Finding Yes. See prior year finding 2023-007. Recommendation I recommend that ABC strengthen its internal controls over the satisfactory academic progress process by implementing procedures to ensure students' eligibility for Title IV financial assistance is evaluated prior to awarding and disbursing funds. Management should require that satisfactory academic progress evaluations are performed in accordance with institutional policy, maintain complete documentation supporting all satisfactory academic progress determinations and approved appeals, utilize Jenzabar system controls and reports to identify students who do not meet satisfactory academic progress requirements before disbursement, and require supervisory review of students approved through the appeal process to ensure compliance with federal regulations. Management’s Response The Institution concurs with this finding. Arkansas Baptist College will review and adhere to its practices, policies, and procedures along with federal guidelines as it relates to students meeting satisfactory academic progress. Arkansas Baptist College has an SAP appeal committee in place to enforce and abide by Arkansas Baptist College's policy.