Finding 30432 (2022-008)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 24262
Auditor: Rsm US LLP

AI Summary

  • Core Issue: One out of two months lacked proper documentation for loan reconciliation, risking payment delays from the Department of Education.
  • Impacted Requirements: Institutions must reconcile loan disbursements with COD records within 15 days, as per federal regulations.
  • Recommended Follow-Up: Establish a formal reconciliation process, maintain supporting records, and ensure an independent review of reconciliations.

Finding Text

Finding No. 2022-008?Special Tests ? Direct Loan Reconciliations Federal Agency: U.S. Department of Education Program: Federal Direct Student Loans: ALN: 84.268 Criteria: Institutions must report all loan disbursements and submit required records to COD within 15 days of disbursement (OMB No. 1845-0021). Each month, COD provides institutions with a School Account Statement (SAS) data file which consists of a Cash Summary, Cash Detail and (optional at the request of the institution) Loan Detail records. The institution is required to reconcile these files to the institution?s financial records. Since up to three Direct Loan program years may be open at any given time, institutions may receive three SAS data files each month (34 CFR 685.102(b), 685.300(b), 685.301, and 303). Condition: Out of two months selected, one month did not have proper documentation to support reconciliation or evidence of review of reconciliation was noted. Questioned Costs: None. Prevalence: One out of two months tested did not have proper support of reconciliation or evidence of review. The sample was not intended to be, and was not, a statistically valid sample. Effect: Lack of a formal reconciliation process and review of the reconciliations could result in the DOE withholding payments to the Conservatory. Cause: There was significant turnover in the people administering the program and records were not properly maintained to support reconciliations performed. Recommendation: We recommend that the Conservatory implement a formal reconciliation process and all records be maintained to support the reconciliation. In addition, we recommend the reconciliation be reviewed by someone other than the person performing the reconciliation procedures. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and corrective actions will be made.

Corrective Action Plan

Finding No. 2022-008 Special Tests ? Direct Loan Reconciliations Finding: Out of 2 months selected, 1 month did not have proper documentation to support reconciliation or evidence of review of reconciliation was noted. Corrective Action Taken or Planned: The Office of Financial Aid is entirely new and existing staff could not find all of the direct loan reconciliation files. Management believes that this process was occurring, but documentation was lost in all the turnover. Current staff are trained in this process and understand its importance. Both the Bursars Office and the Office of Financial Aid will approve direct loan reconciliations going forward. Expected to be completed April 2023. Responsible person Rebecca Barry-Wolff, Associate Director of Student Financial Planning.

Categories

Student Financial Aid Matching / Level of Effort / Earmarking Special Tests & Provisions

Other Findings in this Audit

  • 30433 2022-009
    Significant Deficiency
  • 30434 2022-010
    Significant Deficiency
  • 30435 2022-009
    Significant Deficiency
  • 30436 2022-009
    Significant Deficiency
  • 30437 2022-009
    Significant Deficiency
  • 30438 2022-003
    Significant Deficiency
  • 30439 2022-004
    Significant Deficiency
  • 30440 2022-005
    Material Weakness
  • 30441 2022-006
    Significant Deficiency Repeat
  • 30442 2022-007
    Significant Deficiency
  • 30443 2022-009
    Significant Deficiency
  • 30444 2022-003
    Significant Deficiency
  • 30445 2022-004
    Significant Deficiency
  • 30446 2022-005
    Material Weakness
  • 30447 2022-006
    Significant Deficiency Repeat
  • 606874 2022-008
    Significant Deficiency
  • 606875 2022-009
    Significant Deficiency
  • 606876 2022-010
    Significant Deficiency
  • 606877 2022-009
    Significant Deficiency
  • 606878 2022-009
    Significant Deficiency
  • 606879 2022-009
    Significant Deficiency
  • 606880 2022-003
    Significant Deficiency
  • 606881 2022-004
    Significant Deficiency
  • 606882 2022-005
    Material Weakness
  • 606883 2022-006
    Significant Deficiency Repeat
  • 606884 2022-007
    Significant Deficiency
  • 606885 2022-009
    Significant Deficiency
  • 606886 2022-003
    Significant Deficiency
  • 606887 2022-004
    Significant Deficiency
  • 606888 2022-005
    Material Weakness
  • 606889 2022-006
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $6.39M
84.038 Federal Perkins Loans $1.45M
84.425 Covid-19 - Education Stabilization Fund $468,940
84.033 Federal Work-Study Program $287,786
84.063 Federal Pell Grant Program $222,747
84.007 Federal Supplemental Educational Opportunity Grants $121,997
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $75,888