Finding 400556 (2023-001)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2024-06-11

AI Summary

  • Core Issue: The Organization reported incorrect loan disbursement dates for 87.5% of students, violating federal requirements.
  • Impacted Requirements: This affects compliance with the eligibility requirement under CFR 34 668.164.
  • Recommended Follow-Up: Correct the disbursement dates in the COD system and enhance controls for accurate reporting.

Finding Text

Criteria: The disbursement amounts and dates reported to the Department of Education must be the amounts and dates of the actual disbursement to the students’ accounts (CFR 34 668.164). Condition: The Organization did not report actual loan disbursement dates to the Common Origination and Disbursement (COD) system for 7 of the 8 students in the sample (87.5%). We consider this condition to be a material weakness in internal control over compliance relating to the Eligibility compliance requirement. Statistical sampling was not used in making sample selections. Questioned Costs: N/A Cause: The Organization noted this was an error that occurred using the G5 drawdown date instead of the actual disbursement date per the students’ account ledgers. Effect: The result is incorrect disbursement dates were reported to the Department of Education. Recommendation: We recommend the Organization correct the disbursement dates in COD and tighten controls over reporting disbursement dates. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.

Corrective Action Plan

Condition: The Organization did not report actual loan disbursement dates to the Common Origination and Disbursement (COD) system for 7 of the 8 students in the sample (87.5%). We consider this condition to be a material weakness in internal control over compliance relating to the Eligibility compliance requirement. Statistical sampling was not used in making sample selections. Corrective Action Plan: The issue regarding reporting of loan disbursement dates occurred as the result of a miscommunication between the Financial Aid officer at SIEAM and our CPA. Our accountant was unaware that the specific disbursement date reported by Campus Ivy was required to be the disbursement date recorded in our student ledgers. All disbursements occurred very close to the date, but were not recorded on the exact date. This miscommunication and knowledge gap has already been remedied. At this time, both our CPA and our Financial Aid officer understand the statutory requirement for this reporting and have made the needed changes. Responsible Person for Correction Action Plan: Craig Mitchell, President, in conjunction with Sabu Kallingal, Dean of Students and Financial Aid Officer, and Franz Aponte, CPA. Implementation Date for Corrective Action Plan: The CAP was implemented on May 17, 2024.

Categories

Cash Management Eligibility Material Weakness Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 400557 2023-001
    Material Weakness
  • 400558 2023-002
    Material Weakness
  • 400559 2023-002
    Material Weakness
  • 976998 2023-001
    Material Weakness
  • 976999 2023-001
    Material Weakness
  • 977000 2023-002
    Material Weakness
  • 977001 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $880,898
84.033 Federal Work-Study Program $2,609