Finding Text
2021-002 Noncompliance with Uniform Grant Guidance Requirements
FALN Number: 84.268 / 84.063 / 84.007 / 84.379
Program or Cluster Name: Federal Direct Student Loans / Federal Pell Grant Program / Federal Work-Study Program / Federal Supplemental Educational Opportunity Grants / Teacher Education Assistance for College and Higher Education (Student Financial Assistance Cluster)
Agency: U.S. Department of Education
Criteria: To comply with the Student Financial Aid Cluster requirements, institutions must follow direct and material compliance requirements as outlined in the OMB Compliance Supplement. In addition, entities subject to an audit in accordance with Uniform Grant Guidance are required to submit the Data Collection Form with the Federal Audit Clearinghouse. We were engaged to express an opinion on the College’s compliance with direct and material compliance requirements for Student Financial Assistance Cluster. Furthermore, to ensure completeness of the schedule of expenditures of federal awards and appropriate recognition of revenue from Federal awards is reflected in the College’s accounting records, the expenditures on the schedule of expenditure of federal awards should be reconciled to the College’s accounts and records.
Condition: Because of the closure of the College, we were unable to obtain sufficient audit evidence of student records to test the compliance of direct and material compliance requirements which were identified as activities allowed or unallowed, cash management, eligibility, reporting, and special tests and provisions. In addition, management was unable to provide sufficient documentation to support the reconciliation of the schedule of expenditures of federal awards to the College’s accounts and records. Further, we noted that the management did not submit the data collection form to the Federal Audit Clearinghouse in a timely manner.
Cause: Due to the closure of the College, Ellucian Banner (“Banner”), the accounting and financial system for the College was shut down in preparing for the upcoming shutdown of the College. Management lost access to electronic files in Banner and proper maintenance of student records were neither maintained by management nor was the data downloaded from Banner prior to the system being shut down.
Effect: The lack of a formal closing process and lack of maintenance of sufficient documentation for student records made it impossible for us to obtain sufficient audit evidence of student records to test the compliance of direct and material compliance requirements. In addition, we were unable to test the completeness of the schedule of expenditures of federal awards since it did not reconcile to tuition revenue as reflected in the College’s accounts and records. Lastly, management was unable to submit the data collection form to the Federal Audit Clearinghouse by the required due date.
Repeat Finding: No
Recommendation: We recommend that the outsourced financial consultants and those charged with governance maintain proper student records as the College continues with its liquidation. In addition, we recommend the schedule of expenditures of federal awards be reconciled to the College’s accounts and records. Finally, management should ensure that future data collection forms that may be required to be submitted are done so on a timely basis.
Management’s Response: See corrective action plan attached.