Finding 24843 (2022-001)

Significant Deficiency Repeat Finding

Requirement

Questioned Costs

Year

2022

Accepted

2022-12-07

Audit: 20958

Organization: Beacon College, Inc. (FL)

Auditor: Cliftonlarsonallen LLP

AI Summary

Core Issue: The College awarded loans and Pell grants that were below the maximum eligible amounts for some students, indicating a significant deficiency in compliance controls.
Impacted Requirements: Regulations (34 CFR 685.203 and 34 CFR 690.63) specify the maximum loan amounts and Pell grant calculations based on student eligibility factors.
Recommended Follow-Up: The College should review and improve its policies for accounting for transfer credits and adjusting awards to ensure compliance with federal regulations.

Finding Text

2022 ? 001 Awarding of Direct Loans and Pell Grants Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.268 ? Federal Direct Loan Program, 84.063 Pell Grant Program Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matter Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.203(a), outlines the maximum subsidized loan amounts for students based on their dependency status, year of education, and other factors. In addition, 34 CFR 690.63 outlines the methodology for calculating the Pell grant award for eligible students. Condition: During our testing, we noted two instances out of 35 students tested where the loans awarded to the student were less than the maximum amount each student was eligible to receive. In addition, we noted one instance out of 29 students tested where the Pell grant award that was less than the amount the student was eligible to receive. Questioned costs: $3,000 under award for subsidized loans, $1,000 under award for unsubsidized loans, and $1,363 under award for Pell grants. Total known questioned costs amounted to $5,363. Context: 2 instances out of 35 students tested for loans and 1 instance out of 29 students tested for Pell grant awards. Cause: For the loan under awards, College did not account for certain transfer credits that made the students eligible for additional funding. For the Pell under award, the College did not adjust federal awards for the impact of changes that occurred after the initial packaging. Effect: The awards for these three students were not in the proper amounts. Repeat finding: Yes. 2021-001 Recommendation: We recommend the College evaluate its policies and procedures for identifying transfer credits and other changes after the initial packaging to ensure that federal awards are revised as needed. Views of responsible officials and planned corrective actions: See Corrective Action Plan prepared by the College.

Corrective Action Plan

2022-001 Awarding of Direct Loans and Pell Grants Recommendation: We recommend the College evaluate its policies and procedures for identifying transfer credits and other changes made after the initial packaging to ensure that federal awards are revised as needed. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: Beacon is implementing a new comprehensive software system (Jenzabar One) which ? paired with NetPartner and PowerFAIDS ?will better identify changes in student status. The system will also include InfoMaker software which the financial aid office will use to pull information needed to double check for late changes in student eligibility. Full implementation of the new software is now estimated to occur in December 2022. In the interim, enhanced procedures have been put in place by the Financial Aid Office to prevent further issues: a. Requesting an updated anticipated graduation list from the Registrar at the beginning of each term to confirm students are awarded appropriately b. Requesting a final graduation list from the Registrar at the end of each term to identify any students whose graduation plan has been delayed and making immediate adjustments to their aid eligibility, if needed. c. Performing a finalized review of all graduating students prior to the end of the academic year to ensure proper adjustments have been made. d. Requesting updated reports from the Registrar of any student receiving credit for transfer coursework prior to the start of each semester and making adjustments immediately to their aid eligibility; e. Prior to disbursement, a second review of all students is being performed to identify students whose grade-level conflicts with determination level for pending loans f. A final review prior to the end of each term is conducted so late adjustments can be made if needed. Name(s) of the contact person(s) responsible for corrective action: Daphne Parks, Vice President of Processing at FAS; Stephanie Knight, Director of Enrollment Services & Financial Aid, Beacon College; Carrie Santaw, Registrar, Beacon College Planned completion date for corrective action plan: Interim measures ? already implemented. Software implementation is scheduled to go live in December 2022.

Other Findings in this Audit

24844 2022-001

Significant Deficiency Repeat
24845 2022-002

Significant Deficiency
601285 2022-001

Significant Deficiency Repeat
601286 2022-001

Significant Deficiency Repeat
601287 2022-002

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
84.268	Federal Direct Student Loans	$4.55M
84.063	Federal Pell Grant Program	$662,432
84.425F	Emergency Relief for Institution	$624,018
84.425E	Emergency Relief for Students	$288,756
84.007	Federal Supplemental Educational Opportunity Grants	$87,590
84.033	Federal Work-Study Program	$36,013