Finding Text
FINDING 2023-002 – Eligibility- Significant Deficiency Over Internal Controls Over Compliance
Criteria: The Code of Federal Regulations, 34 CFR 675.5(a)(2) notes an institution may only award federal work study employment to a student if the award, combined with the other estimated financial assistance the student receives, does not exceed the student’s financial need.
Condition/context: We selected a sample of 13 students receiving federal financial assistance. We noted 2 students with an over awarding of need-based financial aid. In both exceptions, the student’s estimated family contribution (EFC) was high and therefore the financial need was significantly reduced.
After consideration of scholarships received by the students, there was no financial need but, in both circumstances, federal work study funding was earned and paid to the students.
Questioned costs: Known questioned costs total $547.
Cause: In discussing these conditions with SCI-Arc management, there was a higher number of large scholarships received by students which reduces the calculated financial need. A tracking mechanism to ensure federal work study funding is not awarded to students with no financial need was not properly in place.
Effect: If SCI-Arc does not consider student EFC in the awarding and monitoring process of federal work study, the over awarding of federal funds could cause students to receive need-based assistance who otherwise would not be eligible for such federal funding.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend SCI-Arc develop additional procedures to access the EFC of students during the federal work study awarding process. Additionally, the regular monitoring that occurs with each federal work study pay period should include consideration of the total earnings verse total award for each student. When students meet the award maximum and institutional funds are used, this should be documented and properly calculated for the purposes of G5 drawdowns.
Views of responsible officials: Management agrees with the finding noted by the engagement team and has prepared a corrective action plan to address the root cause.