Finding Text
Audit Finding Reference Number 2024 – 012 – Inaccurate Aid Disbursement Records Federal Program and Specific Federal Award Identification ALN Title and Number 84.007 Federal Supplemental Educational Opportunity Grants (SEOG) 84.033 Federal Work-Study Program (FWS) 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loans (Direct) Federal Award Year 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, Financial Reporting, requires institutions to maintain complete and accurate records supporting the administration of Title IV programs. Institutions are responsible for ensuring that records used to administer, reconcile, and report Title IV financial assistance accurately reflect student financial aid activity and are supported by the institution's official financial aid and student account records. Condition and Context During my audit, I noted that ten (10) students were included on ABC's 2023–2024 Title IV aid disbursement report used to support Title IV financial aid activity indicating that Title IV financial assistance had been disbursed. However, the students' billing statements indicated that no Title IV financial assistance was received during the 2023–2024 award year. Consequently, ABC's 2023–2024 Title IV aid disbursement report used to support Title IV financial aid activity was not complete and accurate, and I was unable to rely on the institution's disbursement report for those students. Cause ABC did not establish and implement adequate internal controls to ensure Title IV disbursement records were complete, accurate, and reconciled to the institution's student financial aid and billing records. Specifically, management did not perform periodic reconciliations or supervisory reviews to verify that students included on the Title IV disbursement report had corresponding Title IV disbursements recorded in the student accounting records. Questioned Costs For purposes of this condition, I do not have any questioned costs. Effect As a result of these deficiencies, ABC maintained inaccurate Title IV disbursement records. Inaccurate disbursement records increase the risk that Title IV financial aid activity may be incorrectly reported, reconciliations may not identify errors in a timely manner, and management cannot demonstrate the accuracy and completeness of records supporting the administration of federal student financial assistance programs. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over Title IV disbursement reporting by implementing procedures to ensure Title IV disbursement reports are complete, accurate, and reconciled to the institution's financial aid and student accounting records. Management should utilize Jenzabar reports to reconcile Title IV disbursement activity to student billing records on a regular basis, investigate and resolve discrepancies prior to using the reports for reporting or audit purposes, maintain documentation supporting reconciliations, and require supervisory review of the reconciliation process. Management’s Response The Institution concurs with this finding. Arkansas Baptist College accepts the recommendation to strengthen its internal controls over Title IV disbursement reporting by implementing procedures to ensure Title IV disbursement reports are complete, accurate, and reconciled to the institution's financial aid and student accounting records. Leadership will continue to work to enhance and utilize Jenzabar reports to reconcile Title IV disbursement activity to student billing records on a regular basis, investigate and resolve discrepancies prior to using the reports for reporting or audit purposes, maintain documentation supporting reconciliations, and require supervisory review of the reconciliation process.