Finding 370186 (2023-006)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2024-02-22
Audit: 291731
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The University miscalculated lost revenue due to a formula error in credit hours during COVID-19, leading to an understatement of approximately $750,000.
  • Impacted Requirements: Internal controls were inadequate, failing to ensure compliance with 2 CFR 200.303(a) regarding effective management of federal awards.
  • Recommended Follow-Up: The University should enhance its internal controls to ensure consistent and accurate calculations of lost revenue moving forward.

Finding Text

COVID‐19 Higher Education Emergency Relief Funds – Institution Share – Department of Education Federal Financial Assistance Listing #84.425F Activities Allowed or Unallowed and Allowable Costs/Costs Principles Significant Deficiency in Internal Control Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that they entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The University’s lost revenue calculation should be calculated on a reasonable and consistent method. Condition: The University’s calculated lost revenue was based on the average credit hours per semester prior to COVID‐19 as compared to fiscal years 2020, 2021 and 2022. There was a formula error in the credit hours used during COVID‐19 resulting in an understated amount of lost revenue from the intended methodology. Cause: The University’s internal control process did not detect that the lost revenue based on credit hours was improperly calculated. Effect: The lost revenue calculation was understated by approximately $750,000. Questioned Costs: None as the University’s lost revenue available only would have increased. Context/Sampling: Lost revenue for all applicable years and revenue streams were tested and reviewed. Repeat Finding from Prior Years: No Recommendation: The University should review controls in place to ensure lost revenue is calculated consistently. Views of Responsible Officials: Management agrees. Management’s complete response can be found in the separately issued corrective action plan.

Corrective Action Plan

COVID‐19 Higher Education Emergency Relief Funds – Institution Share Department of Education Federal Financial Assistance Listing #84.425F Activities Allowed or Unallowed and Allowable Costs/Costs Principles Significant Deficiency in Internal Control Finding Summary: The University’s calculated lost revenue was based on average credit hours per semester prior to COVID-19 as compared to fiscal years 2020, 2021 and 2022. There was a formula error in the credit hours used during COVID-19 resulting in an understated amount of lost revenue from the intended methodology. Responsible Individuals: Tami Lansing, Controller Corrective Action Plan: The calculation underwent a review, yet the error eluded detection during the review. In any future COVID-19 lost revenue calculations, we will exercise more detailed scrutiny. The University was constrained by a predetermined threshold for lost revenue, and we had already surpassed that limit. The miscalculation, had it not been overlooked, would have only inflated that amount. It is important to note that the University intentionally approached lost revenue calculations with a conservative basis. Anticipated Completion Date: August 10, 2023

Categories

Allowable Costs / Cost Principles Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 370175 2023-002
    Significant Deficiency Repeat
  • 370176 2023-002
    Significant Deficiency
  • 370177 2023-003
    Material Weakness Repeat
  • 370178 2023-003
    Material Weakness Repeat
  • 370179 2023-003
    Material Weakness
  • 370180 2023-004
    Significant Deficiency
  • 370181 2023-004
    Significant Deficiency
  • 370182 2023-004
    Significant Deficiency
  • 370183 2023-005
    Significant Deficiency Repeat
  • 370184 2023-005
    Significant Deficiency Repeat
  • 370185 2023-005
    Significant Deficiency Repeat
  • 946617 2023-002
    Significant Deficiency Repeat
  • 946618 2023-002
    Significant Deficiency
  • 946619 2023-003
    Material Weakness Repeat
  • 946620 2023-003
    Material Weakness Repeat
  • 946621 2023-003
    Material Weakness
  • 946622 2023-004
    Significant Deficiency
  • 946623 2023-004
    Significant Deficiency
  • 946624 2023-004
    Significant Deficiency
  • 946625 2023-005
    Significant Deficiency Repeat
  • 946626 2023-005
    Significant Deficiency Repeat
  • 946627 2023-005
    Significant Deficiency Repeat
  • 946628 2023-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $3.09M
84.063 Federal Pell Grant Program $1.50M
84.031 Higher Education_institutional Aid $834,152
84.038 Federal Perkins Loan Program $435,196
93.264 Nurse Faculty Loan Program (nflp) $273,927
93.364 Nursing Student Loans $261,461
84.007 Federal Supplemental Educational Opportunity Grants $141,948
97.067 Homeland Security Grant Program $118,590
84.033 Federal Work-Study Program $108,266
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $18,779
84.425 Education Stabilization Fund $5,000