Finding Text
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.038 Federal Perkins Loan Program?Federal Capital Contributions 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award year: July 1, 2021 through June 30, 2022 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions Questioned costs: Unknown Condition?Contrary to federal regulations and District policies and procedures, the District?s Student Financial Assistance (SFA) offices at 8 of its 10 colleges did not perform the Direct Loans program required monthly reconciliations of its student disbursement records with what was reported on the Common Origination and Disbursement (COD) system. Specifically at 8 of 10 colleges, the SFA office did not complete 10 of the 20 monthly reconciliations and/or did not resolve and investigate discrepancies found on another 3 of the 20 monthly reconciliations we selected. Effect?A student may be disbursed more Direct Loans than is allowable if the COD system does not accurately reflect students? award origination and disbursement data. Cause?The District did not monitor its SFA offices? adherence to District-wide policies and procedures to ensure their compliance with Direct Loans program requirements. Specifically, although the District had communicated District-wide policies to the SFA offices at each of its 10 colleges that are responsible for administering the Direct Loans program, adhering to federal regulations, and following District-wide policies and procedures, it did not monitor the colleges? adherence to them. As a result, the District was unaware that 8 SFA offices did not follow the District-wide policies and procedures for performing timely monthly reconciliations of students? Direct Loans information in the District student records to what they inputted in the COD system and to ensure they updated and corrected any discrepancies found in the reconciliations performed. District management reported that some of the SFA offices claimed to have performed the monthly reconciliations; however, the reconciliations were not documented and retained. Criteria?Federal regulations and District policies and procedures require the colleges? SFA offices, on a monthly basis, to reconcile student records with Direct Loans program disbursement records submitted to and accepted on the COD system (34 CFR ??685.300 [b][5] and [9] and District?s Direct Loan Monthly Reconciliation Process). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR ?200.303). Recommendations 1. The District?s SFA offices should follow the District-wide policies and procedures that require them to: a. Perform timely monthly reconciliations of their Direct Loans student information maintained on the District?s student system to the COD system and investigate and correct any errors in student data. b. Document and retain reconciliations performed. 2. The District should monitor its SFA offices to ensure their compliance with District policies and procedures for the Direct Loans program. The District?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2021-103.