Finding 22714 (2022-004)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-02-20
Audit: 17960
Organization: Art Academy of Cincinnati (OH)

AI Summary

  • Core Issue: Monthly reconciliations for Direct Loans were not completed from June to September 2021 due to personnel changes.
  • Impacted Requirements: Failure to reconcile cash received with disbursements violates FSA Handbook guidelines.
  • Recommended Follow-Up: Review and document internal controls to maintain compliance during personnel transitions; ensure monthly reconciliations are performed moving forward.

Finding Text

Federal Program: Federal Direct Student Loans [AL #84.268]. Criteria: Per the FSA Handbook page 4-131, ?A school that participates in the Direct Loan Program is required to reconcile cash (funds it received from the G5 system to pay its students) with disbursements (actual disbursement recorded) it submitted to the Common Origination and Disbursement (COD) system monthly.? Condition: For the fiscal year ending May 31, 2022, monthly Direct Loan Reconciliations were not performed for the months of June 2021 through September 2021. Cause: There was a transition of personnel in the finance department resulting in monthly reconciliations not being performed. Effect: Direct loans may not reconcile on a monthly basis for the months of June 2021 through September 2021 between the finance department, financial aid department, G5, and COD. As such funds may be required to be returned and were not identified in a timely manner. Questioned Costs: None identified. Context: Sample was not able to be obtained from the months of June 2021 through September 2021. Repeat Finding: This is a repeat finding. Recommendation: We recommend the Academy review their internal controls and document them to ensure compliance during transitional periods of personnel.. Views of Responsible Officials: The Academy is in agreement with the finding. Direct Loan reconciliations will be performed on a monthly basis moving forward by the Director of Financial Aid and a report provided to the VP of Administration of Finance showing the tie out between G5 and COD.

Corrective Action Plan

Findings 2022-004 and 2021-001 Direct Loan Reconciliations Condition: For the fiscal year ending May 31, 2022, monthly Direct Loan Reconciliations were not performed for the months of June 2021 through September 2021. Views of Responsible Officials: The Academy does not disagree with this audit finding. Corrective Action Plan: Direct Loan reconciliations a performed on a monthly basis by the Director of Financial Aid and a report is provided to the VP of Administration of Finance showing the tie out between G5 and COD. Responsible Party: Frances Hutchinson, Director of Financial Aid Anticipated Completion Date: This process was implemented in October 2021.

Categories

Student Financial Aid Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 22711 2022-001
    Material Weakness
  • 22712 2022-002
    Significant Deficiency
  • 22713 2022-003
    Significant Deficiency
  • 22715 2022-001
    Material Weakness
  • 22716 2022-002
    Significant Deficiency
  • 22717 2022-003
    Significant Deficiency
  • 22718 2022-001
    Material Weakness
  • 22719 2022-002
    Significant Deficiency
  • 22720 2022-003
    Significant Deficiency
  • 22721 2022-001
    Material Weakness
  • 22722 2022-002
    Significant Deficiency
  • 22723 2022-003
    Significant Deficiency
  • 599153 2022-001
    Material Weakness
  • 599154 2022-002
    Significant Deficiency
  • 599155 2022-003
    Significant Deficiency
  • 599156 2022-004
    Significant Deficiency Repeat
  • 599157 2022-001
    Material Weakness
  • 599158 2022-002
    Significant Deficiency
  • 599159 2022-003
    Significant Deficiency
  • 599160 2022-001
    Material Weakness
  • 599161 2022-002
    Significant Deficiency
  • 599162 2022-003
    Significant Deficiency
  • 599163 2022-001
    Material Weakness
  • 599164 2022-002
    Significant Deficiency
  • 599165 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $1.99M
84.063 Federal Pell Grant Program $615,789
84.425 Education Stabilization Fund $75,000
84.033 Federal Work-Study Program $38,047
84.007 Federal Supplemental Educational Opportunity Grants $34,184
21.019 Coronavirus Relief Fund $2,594