FAC Explorer

Finding 387578 (2023-001)

Significant Deficiency Repeat Finding
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-03-28
Audit: 299699
Organization: College of Mount Saint Vincent (NY)
Auditor: Grant Thornton LLP

AI Summary

  • Core Issue: The College failed to report some Direct Loan and Pell Grant disbursements to the COD system within the required 15-day timeframe.
  • Impacted Requirements: Non-compliance with federal regulations regarding timely disbursement reporting for Title IV funds.
  • Recommended Follow-up: The College should enhance its internal controls to ensure all disbursement records are submitted on time to avoid future deficiencies.

Finding Text

Finding 2023-001 - Reporting - Direct Loan and Pell Common Origination and Disbursement (Significant Deficiency) U.S. Department of Education - Student Financial Assistance Cluster Federal Pell Grant Program (84.063) Federal Direct Loan Program (84.268) Federal Award Year: 2021-2022 Criteria and Context: Pursuant to Federal Register Volume 87, Number 105, an institution must submit Pell Grant and Direct Loan disbursement records to the Common Origination and Disbursement (“COD”) system no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. In accordance with 34 CFR 668.164(a), Title IV program funds are disbursed on the date that the institution credits a student’s account at the institution or pays a student or parent directly. Title IV program funds are disbursed even if an institution uses its own funds in advance of receiving program funds from the Department. Condition, Cause, and Effect: During our testing surrounding the College’s COD reporting process, the College did not report all Direct Loan and Pell Grant disbursements to COD within the 15-day timeframe stipulated in Federal Register Volume 87, Number 105. Of the one hundred eleven (111) individual Direct Loan disbursements for thirty-four (34) students selected for testing, we noted two (2) records that were not reported within the aforementioned 15-day timeframe. These two (2) Direct Loan records were reported two hundred seventy-three (273) days after the actual disbursement date. Of the thirty-eight (38) individual Pell Grant disbursements for twenty-one (21) students selected for testing, we noted two (2) records that were not reported within the aforementioned 15-day timeframe. These two (2) Pell Grant records were reported between thirty-two (32) and thirty-nine (39) days after the actual disbursement date. Questioned Costs: None noted Identified as a Repeat Finding: Yes Recommendation: The College should review the effectiveness of its internal controls governing the timely submission of Federal Direct Loan and Pell Grant disbursements to ensure such records are submitted within the appropriate timeframe.

Corrective Action Plan

The College has conducted a comprehensive review and update of its procedures for reporting Federal Direct Loan and Pell Grant disbursements to the COD system. The College has multiple program calendars which overlap our standard academic calendar, including two aid years concurrently during spring and summer sessions. We have identified the multiple start dates as a primary challenge with timely reporting and have initiated corrective actions to synchronize program dates more closely with the standard academic calendar. This includes the phasing out of a summer header student cohort to prevent similar issues in the 2024-2025 academic year. A bi-weekly reconciliation report has been created to review activity and identify early discrepancies to maintain better internal controls. During the 2021-2022 aid years, the Financial Aid office had four Financial Aid directors with different approaches to aid awarding strategy. The current Director is focused on refining processes to enhance internal controls. Additionally, the College recognized a need for staff professional development and training and engaged a Financial Aid consultant to review our systems and processes. The Financial Aid consultant now conducts quarterly assessments to help us maintain our setups and provides ongoing training for our team. These steps are in line with best practices and are part of our commitment to minimizing errors and conducting timely financial aid reporting. The College has made significant improvements. The number of selected records failing the 15-day COD reporting window decreased from 15 in FY22 to 4 in FY23.

Categories

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

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $17.82M
84.063 Federal Pell Grant Program $5.41M
84.038 Federal Perkins Loan Program $427,024
84.425 Education Stabilization Fund $396,997
84.033 Federal Work-Study Program $393,579
84.042 Trio_student Support Services $331,573
84.007 Federal Supplemental Educational Opportunity Grants $263,644
84.031 Higher Education_institutional Aid $207,352
93.364 Nursing Student Loans $158,943
16.525 Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault, and Stalking on Campus $44,267
47.076 Education and Human Resources $39,200
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $1,415