Finding 388278 (2023-001)

Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.303, nonfederal entities 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. Condition / Context: During our audit procedures, we noted that a formal documented review process was not available for the following areas at two of the District’s four colleges:  R2T4 calculations (two colleges)  Student award packaging (one college)  Students selected for verification by the Department of Education (one college) Questioned Costs: None. Cause: The Colleges' Financial Aid Director positions were vacant in early 2022-23, resulting in an oversight. Effect: A lack of internal controls can result in noncompliance with provisions of the various programs within the Student Financial Assistance Cluster. Repeat Finding: See prior year finding 2022-002. Recommendation: We recommend the Colleges reinforce their review processes, monitor proper follow-up on audit findings, and review all activity level controls to ensure compliance with the various requirements of the Student Financial Assistance Cluster. Action taken in response to finding: The District continues to enlist the assistance of Huron and other vendors to assess our internal controls over financial aid federal awards. The district collaborates with external entities to engage in comprehensive training to district-wide staff involved in student financial aid processing. College FA staff are sent regular reminders to reconcile and perform R2T4 calculations. Management is actively recruiting to fill vacant positions in this area across the district. Planned completion date for corrective action plan: June 30, 2024.