Finding Text
2023-008 – Eligibility – Material Weakness in Internal Controls over Compliance and Material
Noncompliance
Student Financial Assistance Cluster
U.S Department of Education
Federal Assistance Listing Number: 84.063, 84.268, 84.007, 84.033, 84.379
Federal Program Name: Federal Pell Grant Program, Federal Direct Student Loans, Federal Supplemental
Educational Opportunity Grants, Federal Work-Study Program
Criteria: The cost of attendance (COA) is the cornerstone of establishing a student’s financial need, as it sets a
limit on the total aid that a student may receive for purposes of the Campus-Based, TEACH Grant, and Direct
Loan programs, and is one of the basic components of the Pell Grant calculation. COA is determined by law
(Higher Education Act, Sec. 472) and is not subject to regulation by the Department of Education. The law
specifies the types of costs that are included in the COA, but each school must determine the appropriate and
reasonable amounts to include for each eligible COA category for its students, based on the criteria described in
the Federal Student Aid Handbook.
Condition/context: During our testing of 30 students out of a population of 292 students who received federal
awards during the year, the College was unable to provide a schedule that included the complete budgeted cost
of attendance used for packaging the 2022 – 2023 award year. As a result, we were not able to conclude that the
cost of attendance used in packaging each student or the award amounts disbursed were appropriate. We could
not conclude that the total aid awarded did not exceed the student’s financial need or cost of attendance.
In addition, we noted the following issues while testing eligibility. Out of a population of 30 students:
- Using the cost of attendance noted on the award letter, we were unable to recalculate the Pell award
disbursed for 6 students.
- We noted during review of satisfactory academic progress, 4 students appeared to be receiving awards in
period of suspension. We were unable to obtain evidence that the students had applied and been
approved for an appeal or other rationale for continued receipt of Title IV funds.
- For 2 students who withdrew from the institution, Title IV funds received do not appear to have been
evaluated for return to Title IV.
- For 2 students, refunds of credit balances created by disbursement of Title IV funds were not issued to
students within the required timeframe.
- For 1 student, based on the cost of attendance per the award letter, the student appeared to be over
awarded
- For 1 student, Title IV funds disbursed were not properly reflected on the student ledger.
- For 1 student, the award letter did not reflect an award during a term for which a student received a Title
IV disbursement.
- For 1 student, Title IV aid was disbursed multiple periods after the award was made.
Questioned costs: Undeterminable.
Cause/Effect: The College did not have adequate controls in place to ensure the appropriate and reasonable
amounts were included in each eligible cost of attendance category for its students, that awards were properly
calculated, refunds were disbursed timely and student records were accurate. We are not able to conclude that
the College is in compliance with eligibility requirements in the OMB compliance supplement.
Repeat finding: No
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Recommendation: We recommend the College review their policies, procedures and controls to ensure that
annually a cost of attendance schedule is approved, and that the approved schedule is used in packaging student
financial aid. Rationale for adjustments made to the budgeted cost of attendance for individual students should be
documented and support maintained. The College should review all processes and procedures related to
eligibility to ensure controls are well documented and allow them to properly adhere to requirements for eligibility
of Title IV aid.
Views of responsible officials and planned corrective actions:
Responsible Individuals: Michael N. Espinoza, Vice President of Student Services
Views of responsible officials and planned corrective actions: The college entered into a third-party contract to
manage financial aid packaging and awarding. Calculation and reporting completed by prior Financial Director
submitted national average as the college calculations instead of college service area specific calculations. The
college worked with the third-party provider to ensure policies and processes adopted in July 2023 to ensure cost
of attendance (COA) reporting and calculations are complete and accurate going forward.
Recommendation: We recommend the College review their policies, procedures and controls to ensure that
annually a cost of attendance schedule is approved, and that the approved schedule is used in packaging student
financial aid. Rationale for adjustments made to the budgeted cost of attendance for individual students should be
documented and support maintained. The College should review all processes and procedures related to
eligibility to ensure controls are well documented and allow them to properly adhere to requirements for eligibility
of Title IV aid.
Anticipated Completion Date: to be completed by June 30, 2024