Finding Text
Audit Finding Reference Number Questioned Cost 2024 – 008 – Aid in Excess of Documented Need $ 3,174 Federal Program and Specific Federal Award Identification ALN Title and Number 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loans (Direct) 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 Uniform Guidance Compliance Supplement, Part 5 Section E (Eligibility) specified that the annual award should be calculated based upon certain factors and coordinated among all programs to ensure that the total aid is not awarded in excess of the student’s financial need. Title IV regulations, Section(s) 673.5, 682.603, and 685.301 state that an institution may not award financial aid to a student if the aid, when combined with other resources, exceeds the student’s financial need. Condition and Context During my audit I noted one (1) student out of eighty-seven (87) tested received financial aid in excess of their documented need. Cause ABC did not establish, implement or monitor adequate internal controls to ensure Title IV financial aid awards were reviewed and coordinated prior to disbursement to prevent total financial assistance from exceeding a student's documented financial need. Specifically, management did not ensure that all sources of financial assistance were considered when determining the student's eligibility for need-based aid. Questioned Costs For purposes of this condition, I have questioned costs totaling $3,174 as follows: Program Amount Federal Pell Grant $ 1,016 Federal Work Study 285 Federal Direct Loan 1,873 Total $ 3,174 Effect As a result of these deficiencies, one (1) student received Title IV financial assistance in excess of the student's documented financial need. Consequently, ABC did not demonstrate compliance with federal eligibility requirements, resulting in questioned costs of $3,174 and increasing the risk that federal financial aid funds were awarded in excess of allowable amounts. Repeat Finding Yes. See Schedule of Prior Year Audit Finding 2023-008. Recommendation I recommend that ABC strengthen its internal controls over the financial aid awarding process by implementing procedures to ensure all Title IV awards are reviewed and coordinated prior to disbursement to prevent aid from exceeding a student's documented financial need. Management should utilize Jenzabar reports and system edits, where available, to identify potential over awards, perform documented reviews of students' financial aid packages before funds are disbursed, promptly resolve identified over awards, and require supervisory review of award adjustments to ensure compliance with federal regulations. Management’s Response The Institution concurs with this finding. Under new leadership, Arkansas Baptist College will adhere to its policies, procedures, processes, and federal guidelines as it relates to over-awarding students, as well as ensure automated processes are implemented properly and fully tested to ensure such.