Finding 3742 (2023-002)

Significant Deficiency
Requirement
ABCEFGHIJLMNP
Questioned Costs
-
Year
2023
Accepted
2023-12-08
Audit: 5899
Organization: Warner Pacific University (OR)

AI Summary

  • Core Issue: The University lacks adequate internal controls over compliance, particularly in reviewing student award packages and return of Title IV calculations.
  • Impacted Requirements: Federal regulations require effective internal controls to ensure compliance with federal statutes and program guidelines.
  • Recommended Follow-Up: Implement a documented review process for awarding, Title IV calculations, and professional judgment cases to enhance checks and balances.

Finding Text

2023 – 002 Internal Controls Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: Various Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per federal regulations 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, per the student financial aid handbook, a school must ensure that its administrative procedures for the FSA programs include an adequate system of internal controls or checks and balances. Condition: During our compliance testing for eligibility, we noted there is not an individual review of students' award packages; however, we noted there were some mitigating controls within the student information system as well as monthly reconciliations that may catch various issues. In addition, we noted there is no review for return of title IV calculations. There is one individual performing these calculations. Lastly, we noted there is only one individual who is processing and reviewing professional judgment cases. Questioned costs: None Context: During our audit procedures, it was noted there are not sufficient checks and balances in place over a few compliance requirements. Cause: The University has not historically had review procedures in place. Effect: While we found no compliance errors in our samples, there is a risk of human error causing future compliance errors. Repeat finding: No Recommendation: We recommend the University review their internal control procedures over awarding, return of title IV calculations, and professional judgment and implement a formally documented review process. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Department of Education 2023-002 Student Financial Assistance Cluster – Assistance Listing No. Various Recommendation: We recommend the University review their internal control procedures over awarding, return of title IV calculations, and professional judgment and implement a formally documented review process. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University will make the following changes: Awarding: The following are internal controls that the University already has in place to review awards for accuracy. • Financial aid worksheet: As part of the awarding process every award year, a financial aid worksheet is created to verify that the awards input in Colleague are accurate. The worksheet is updated each time there is a change to a student’s financial aid eligibility or status. • COD report monitoring: On a weekly basis, reports are processed to determine if there are any discrepancies between what has been awarded in Colleague and what is being reported/accepted in COD. Any discrepancies found are reviewed and corrected. • Monthly loan/grant reconciliation: The monthly loan/grant reconciliation monitors for any discrepancies between what is shown as disbursed in Colleague and the disbursements that have been accepted by COD. Any discrepancies found are reviewed and corrected. • Over award report: Processed at the beginning of each term, this report details if any students are awarded beyond unmet need and/or cost of attendance. Any discrepancies found are reviewed and corrected. • Enrollment level report: Processed before the start of each term and at the end of the add/drop period, this report evaluates awarded enrollment level against actual enrolled credits. Any discrepancies found are reviewed and corrected. • Disbursement processing rules: There are rules built into the Colleague system to limit disbursement of awards when actual enrollment status does not match awarded status. Any discrepancies found are reviewed and corrected. Beyond the internal controls already in place, the University will implement the following: • Secondary review of awards: For new Financial Aid Counselors, all awards will be reviewed for the first two months to ensure accuracy and commitment to proper training. Additionally, based on current staffing levels, a random selection of 10% of all awarded students will be reviewed to evaluate for awarding accuracy. • Grade level review: After the 10th day of each term, a review will be performed to compare the current class standing of each student to the grade level that was used for awarding. Any discrepancies found will be reviewed and corrected. Return to Title IV (R2T4) Calculations: The Colleague system is used to process R2T4 calculations. This system has been developed to correctly calculate the return formula based on limited information entered by the R2T4 processor. To ensure the correct information is entered, the University will implement a secondary review of all R2T4 calculations. The primary R2T4 processor will enter all required information in the R2T4 calculation screen within Colleague, and then print the screen for review by a secondary member before the return is referred for processing. The primary processor and secondary reviewer will be required to sign off on the printed calculation sheet, verifying the accuracy of the information. The items that will be included as part of the secondary review will be the date of determination, enrollment status, last date of attendance, and institutional charges. Professional Judgment: The University will implement a Professional Judgment Committee. The committee will consist of at least one Financial Aid Counselor and the Director of Financial Aid. The committee will collectively review all the documentation for each case to make a final determination. Name of the contact person responsible for corrective action: Dustin Kummrow, Director of Financial Aid Planned completion date for corrective action plan: November 1, 2023

Categories

Student Financial Aid Eligibility Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 3743 2023-002
    Significant Deficiency
  • 3744 2023-002
    Significant Deficiency
  • 3745 2023-002
    Significant Deficiency
  • 3746 2023-002
    Significant Deficiency
  • 3747 2023-002
    Significant Deficiency
  • 3748 2023-003
    Significant Deficiency
  • 3749 2023-003
    Significant Deficiency
  • 3750 2023-003
    Significant Deficiency
  • 3751 2023-003
    Significant Deficiency
  • 3752 2023-003
    Significant Deficiency
  • 3753 2023-003
    Significant Deficiency
  • 580184 2023-002
    Significant Deficiency
  • 580185 2023-002
    Significant Deficiency
  • 580186 2023-002
    Significant Deficiency
  • 580187 2023-002
    Significant Deficiency
  • 580188 2023-002
    Significant Deficiency
  • 580189 2023-002
    Significant Deficiency
  • 580190 2023-003
    Significant Deficiency
  • 580191 2023-003
    Significant Deficiency
  • 580192 2023-003
    Significant Deficiency
  • 580193 2023-003
    Significant Deficiency
  • 580194 2023-003
    Significant Deficiency
  • 580195 2023-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $5.48M
84.063 Federal Pell Grant Program $1.45M
84.425 Education Stabilization Fund $539,326
84.038 Federal Perkins Loan Program $394,063
84.007 Federal Supplemental Educational Opportunity Grants $152,714
84.033 Federal Work-Study Program $106,590
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $11,316