Finding 2366 (2020-005)

Material Weakness
Requirement
C
Questioned Costs
-
Year
2021
Accepted
2023-11-26
Audit: 4064
Organization: Concordia College (NY)

AI Summary

  • Core Issue: The College improperly managed Student Financial Assistance funds, drawing more than necessary and lacking documentation for G5 drawdown controls.
  • Impacted Requirements: Internal procedures for fund management and documentation standards were not followed, affecting compliance with federal regulations.
  • Recommended Follow-Up: Ensure proper documentation and controls are established for fund disbursement, and implement a backup system for financial records before closing operations.

Finding Text

2020-005 Cash Management 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 Condition: We noted that the College did not follow internal procedures to ensure that Student Financial Assistance funds were not drawn down in excess of the institution’s immediate needs for disbursement to student accounts. In addition, there was no documentation available to verify that controls over the G5 drawdowns were reviewed or approved prior to initiation. Status: Due to the closure of the College, various software systems were shutdown without downloading data to a backup drive. In addition, sufficient paper documentation was not maintained in supporting the activity of the College for both financial transactions and remaining compliance requirements in winding down the operations. Student and financial scholarship records could not be provided and as such the correction of the finding could not be verified. See current year finding 2021-002.

Corrective Action Plan

Management’s Response: Concordia College ceased academic operations in August 2021 and is in the process of winding down its operations and completing its remaining compliance requirements. Subsequent to the announcement of the closure of the College and following the ceasing of academic operations, virtually all employees left their employ with the College. The significant turnover in personnel, transition to outside consultants, and preparing proper teach out and transition plans for remaining students was a much larger focus than compliance requirements, which led to additional time lapsing between the prior year when findings were discovered to the current report being sent out. Additionally, due to the shutdown of Banner and the time taken to complete the audit, it is difficult for the College to obtain historical student and financial information pertaining to the period under audit.

Categories

Cash Management Student Financial Aid Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 2362 2021-002
    Material Weakness
  • 2363 2020-002
    Material Weakness
  • 2364 2020-003
    Significant Deficiency
  • 2365 2020-004
    Material Weakness Repeat
  • 2367 2020-006
    Significant Deficiency
  • 2368 2020-007
    Significant Deficiency Repeat
  • 2369 2020-008
    Material Weakness Repeat
  • 2370 2020-009
    Significant Deficiency
  • 2371 2020-010
    Material Weakness
  • 2372 2020-011
    Material Weakness
  • 2373 2020-012
    Material Weakness
  • 2374 2020-013
    Material Weakness
  • 578804 2021-002
    Material Weakness
  • 578805 2020-002
    Material Weakness
  • 578806 2020-003
    Significant Deficiency
  • 578807 2020-004
    Material Weakness Repeat
  • 578808 2020-005
    Material Weakness
  • 578809 2020-006
    Significant Deficiency
  • 578810 2020-007
    Significant Deficiency Repeat
  • 578811 2020-008
    Material Weakness Repeat
  • 578812 2020-009
    Significant Deficiency
  • 578813 2020-010
    Material Weakness
  • 578814 2020-011
    Material Weakness
  • 578815 2020-012
    Material Weakness
  • 578816 2020-013
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $7.06M
84.063 Federal Pell Grant Program $1.52M
84.007 Federal Supplemental Educational Opportunity Grants $40,768
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $33,031