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Finding FA 2022-001: Eligibility: Incorrect Federal Pell Grant Amounts Awarded (Repeat Finding) Federal Program Information Assistance Listing Number: ALN 84.063 Federal Program Name: Student Financial Assistance Cluster: Federal Pell Grant Program Federal Agency: U.S. Department of Education Passed Through Entity: N/A Federal Award Number: P063P200033 Federal Award Year: July 1, 2021, to June 30, 2022 Campus: Los Angeles City College Compliance Requirement: Eligibility Criteria or Specific Requirement: Per 34 Code of Federal Regulations (CFR) 690.62 Calculation of a Federal Pell Grant, the amount of a student?s Pell Grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year. The Uniform Guidance Compliance Supplement states that the Department of Education provides institutions Payment and Disbursement Schedules for determining Pell awards each year. The Payment or Disbursement Schedule provides the maximum annual amount a student would receive for a full academic year for a given enrollment status, Expected Family Contribution (EFC), and Cost of Attendance (COA). The Payment Schedule is used to determine the annual award for full-time, three-quarter time, half-time, and less-than-half-time students. 2 CFR section 200.303 requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Identified Condition: Of the 15 students selected for eligibility testwork at Los Angeles City College, we noted that 1 student had an incorrectly calculated Federal Pell grant award, which resulted in an understatement of the disbursement to the student by $419. The student was eligible to receive $419 yet received none in Summer 2020. Causes and Effect: One overpayment was identified during the audit period due to a class withdrawn after Pell disbursement. In addition, the underpayment identified related to the summer term is due to manual processing. The summer term is unique because it requires District staff to manually review Pell awards from two aid years to ensure the student receives the highest award. The process is labor intensive and complex. Incorrect awards can result in institutional liability. Questioned Costs: See schedule of findings and Questioned Costs The District has a known net understatement of Pell grant award disbursements of $419. The projected total net understatement of the Pell grant award disbursements is $117,592 as follows: See schedule of findings and Questioned Costs This is computed by dividing the error found in the samples per term (Summer term ? net underpayment ($419) and Fall/Spring terms ? $0) over the total Pell awards disbursed in the sample size per term (Summer term - $26,361 and Fall/Spring terms - $545,632) multiplied by the total Pell awards disbursed for the identified colleges per term (Summer term - $7,398,149 and Fall/Spring terms - $103,509,698). The computation is made on a per-term basis on a campus level and not on a district-wide level. Recommendation: We recommend that the District make the necessary system modifications to the PeopleSoft Student Information System (SIS) to ensure student awards are properly calculated. This will help ensure that Federal Pell grants are properly awarded to students who meet the eligibility requirements. Views of Responsible Officials and Planned Corrective Actions: The District has already developed an automated summer Pell solution. The solution has been tested by the field and Central Financial Aid Unit (CFAU) and will be implemented Summer 2023. Personnel responsible for implementation: Steve Giorgi Position of responsible personnel: CFAU Financial Aid Manager Expected date of Implementation: Summer 2023