Finding Text
FINDING 2023-001
Subject: Student Financial Assistance Cluster - Special Tests and Provisions - Enrollment Reporting
Federal Agency: Department of Education
Federal Programs: Federal Pell Grant Program, Federal Direct Student Loans
Assistance Listings Numbers: 84.063, 84.268
Compliance Requirement: Special Tests and Provisions - Enrollment Reporting
Audit Findings: Material Weakness, Other Matters
Condition and Context
As a recipient of Title IV funding from the Federal Pell Grant Program (Pell) and Federal Direct
Student Loans program (direct loan), the University was responsible for reporting accurate enrollment
information for students receiving those awards to the National Student Loan Data System (NSLDS).
Enrollment reporting requires the University to review, update, and certify student enrollment statuses,
program information, and effective dates for each student receiving a Pell and/or direct loan award with a
change in its enrollment information. Although the University had policies and procedures in place over
Enrollment Reporting, a specific process to ensure system defects did not impact reporting requirements
was not implemented. As such, errors in reporting campus level and program level data went undetected.
A sample of 40 students was selected to determine if the University was notifying the Department
of Education of changes in student enrollment information in a timely and accurate manner. Of the 40
students tested, 11 students had incorrect enrollment effective dates reported to the NSLDS for both
campus-level and program level data.
Follow-up procedures determined that the issue was isolated to students in the Spring 2023 term
who had a change in enrollment status from the census date to the end of the term. The issue was a result
of a system defect that pulled the wrong dates into the report the University used to submit the data to the
NSLDS. The issue affected 160 students out of a total of 6,952 students.
The lack of effective internal controls was a systemic issue throughout the audit period, while the
noncompliance was isolated to the Spring 2023 term.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) 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. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
INDIANA STATE BOARD OF ACCOUNTS
14
UNIVERSITY OF SOUTHERN INDIANA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
34 CFR 685.309(b) states in part:
"Enrollment reporting process.
(1) Upon receipt of an enrollment report from the Secretary, a school must update all
information in the report and return the report to the Secretary
(i) In the manner and format prescribed by the Secretary; and
(ii) Within the timeframe prescribed by the Secretary. . . ."
The 2022-2023 Federal Student Aid Handbook, Volume 2, Chapter 3 states in part:
"Sharing Information With NSLDS, Federal Loan Servicers, And Guarantors
Reporting student enrollment data to NSLDS
Student enrollment information is important, and all schools participating or approved to
participate in the FSA programs must have online enrollment access and have some
arrangement to report student enrollment data to the National Student Loan Data System
(NSLDS) through an enrollment roster file. Enrollment information is used to determine if the
student is still considered in school, must be moved into repayment, or is eligible for an inschool
deferment. Program-level enrollment data is also used to determine a student's
eligibility for Direct Subsidized Loans. For students moving into repayment, the out-of-school
status effective date determines when the grace period begins and how soon a student must
begin repaying loan funds. You're required to report changes in the student's enrollment status,
the effective date of the status, and an anticipated completion date. . . ."
Cause
A proper system of internal controls over enrollment reporting was not effective to ensure that
accurate enrollment data was submitted to the NSLDS. Embedded within a properly designed and
implemented internal control system should be internal controls consisting of policies and procedures.
Policies reflect the University's management statements of what should be done to effect internal controls,
and procedures should consist of actions that would implement these policies.
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. As a result, enrollment information was not properly submitted to the NSLDS.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended the University's management establish a system of internal controls that
includes a review of Banner job processes to verify source data is correctly populated so as to ensure that
all data elements required to be submitted to the NSLDS are accurate.
INDIANA STATE BOARD OF ACCOUNTS
15
UNIVERSITY OF SOUTHERN INDIANA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.