Finding Text
MATERIAL WEAKNESS 2022-004 Student Financial Assistance Program Cluster ? Title IV ?Federal Supplemental Opportunity Grants (FSEOG) ? 84.007, Federal Pell Grant Program ? 84.063, Federal Direct Student Loans (Direct Loan) ? 84.268 ? Cash Management and Special Tests and Provisions ? COD Reconciliation Criteria or specific requirement Per 34 CFR 668.162(b)(3), institutions must make disbursements to students as soon as administratively feasible, but no later than three business days following the receipt of funds. In addition, per 34 CFR 685.300(b)(5), institutions must, on a monthly basis, reconcile institutional records with Direct Loan funds received and disbursement records submitted. Condition During testing, it was discovered that Pell and Federal Supplemental Educational Opportunity Grant (FSEOG) funds were drawn down and not disbursed within they required timeframe. In addition, funds were drawn down from Direct Loan sources when they were meant to be drawn from alternative sources. Cause Errors that occurred during the draw down process were not caught and corrected due to the lack of a sufficient monthly reconciliation occurring. Effect Disbursements were not made within required timeframes. In addition, funding was drawn from incorrect sources, and, as a result, the institution was required to return funds after COD discovered the variance. Context Pell in the amount of $348 and FSEOG in the amount of $10,085 were not disbursed within the required timeframe. Funding in the amount of $45,167 was drawn down from Direct Loans that should have been drawn down from alternative sources. Recommendation We recommend that the institution review its reconciliation process and implement controls to ensure that funding is drawn from correct sources and disbursed within three business days of receipt. Views of responsible officials and planned corrective actions See corrective action plan.