Finding 43844 (2022-004)

Material Weakness
Requirement
E
Questioned Costs
$1
Year
2022
Accepted
2023-02-07
Audit: 46666
Organization: Community Christian College (CA)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The College has significant internal control weaknesses and noncompliance with federal eligibility requirements for student financial aid.
  • Impacted Requirements: Violations include exceeding loan limits for first-year students, overpayments in financial aid packages, and incorrect Pell grant disbursements.
  • Recommended Follow-Up: Implement a process to regularly review and verify student eligibility, and establish a document retention policy to ensure compliance with Title IV regulations.

Finding Text

Eligibility Program Name: Student Financial Assistance Cluster Federal Assistance Listing Numbers: 84.007, 84.033, 84.063, and 84.032 Federal Agency: U.S. Department of Education (ED) Type of Finding: Material Weakness in Internal Control and Material Noncompliance Criteria or Specific Requirements 34 CFR section 685.203: In the case of an undergraduate student who has not successfully completed the first year of a program of undergraduate education, the total amount the student may borrow under the Direct Subsidized Loan Program may not exceed $3,500 for a program of study of at least a full academic year in length. 34 CFR section 690.62: The Pell grant for an academic year is based upon the payment and disbursement schedules released by the U.S. Department of Education for each award year. The payment schedules take into account the student?s cost of attendance, EFC and enrollment status. Condition Material Weakness? During testing over the eligibility requirements, the following deficiencies were noted: ? 1 of 68 students loan disbursements exceeded the subsidized loan annual limit for first year students. ? 2 of 68 students total financial aid packages exceeded their cost of attendance resulting in an overpayment of Title IV assistance. ? 14 of 68 students were not disbursed the correct amount of Pell grant based on their enrollment status. ? The College failed to report loan disbursement to NSLDS for 1 out of 68 students. Questioned Costs $19,792 of loan disbursements that exceeded the subsidized loan annual limit for first year students. $10,442 of overpayments as a result of inaccurate financial aid package calculations. $3,804 of overpayments and $8,583 of underpayments as a result of inaccurate disbursement calculations. Context The College contracts with a third-party servicer to perform one or more of the functions associated with processing direct payments of Title IV funds on behalf of the school. The overpayment of Pell grants was due to the College not updating the enrollment status of the students. Additionally, the College did not review the service provider?s calculations or reporting of information to ensure compliance with eligibility requirements. A nonstatistical sample of 68 students out of 346 students were selected for eligibility testing. The College disbursed $3,984,674 of Title IV funds to the students attending the College during the 2021-2022 award year. Effect The College is not in compliance with the Federal eligibility requirements described in the OMB Compliance Supplement. Cause The College did not retain supporting evidence or ensure eligibility requirements were met for students under the Pell Grant and Direct Loan Programs. Repeat Finding No Recommendation The College should implement a process to review, update, and verify student eligibility requirements. The College should maintain a document retention policy in order to comply with Title IV laws and regulations.

Categories

Questioned Costs Student Financial Aid Eligibility Material Weakness Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 43834 2022-004
    Material Weakness
  • 43835 2022-005
    Significant Deficiency
  • 43836 2022-006
    Significant Deficiency
  • 43837 2022-007
    Material Weakness
  • 43838 2022-008
    Significant Deficiency
  • 43839 2022-004
    Material Weakness
  • 43840 2022-005
    Significant Deficiency
  • 43841 2022-006
    Significant Deficiency
  • 43842 2022-007
    Material Weakness
  • 43843 2022-008
    Significant Deficiency
  • 43845 2022-005
    Significant Deficiency
  • 43846 2022-006
    Significant Deficiency
  • 43847 2022-007
    Material Weakness
  • 43848 2022-008
    Significant Deficiency
  • 43849 2022-004
    Material Weakness
  • 43850 2022-005
    Significant Deficiency
  • 43851 2022-006
    Significant Deficiency
  • 43852 2022-007
    Material Weakness
  • 43853 2022-008
    Significant Deficiency
  • 620276 2022-004
    Material Weakness
  • 620277 2022-005
    Significant Deficiency
  • 620278 2022-006
    Significant Deficiency
  • 620279 2022-007
    Material Weakness
  • 620280 2022-008
    Significant Deficiency
  • 620281 2022-004
    Material Weakness
  • 620282 2022-005
    Significant Deficiency
  • 620283 2022-006
    Significant Deficiency
  • 620284 2022-007
    Material Weakness
  • 620285 2022-008
    Significant Deficiency
  • 620286 2022-004
    Material Weakness
  • 620287 2022-005
    Significant Deficiency
  • 620288 2022-006
    Significant Deficiency
  • 620289 2022-007
    Material Weakness
  • 620290 2022-008
    Significant Deficiency
  • 620291 2022-004
    Material Weakness
  • 620292 2022-005
    Significant Deficiency
  • 620293 2022-006
    Significant Deficiency
  • 620294 2022-007
    Material Weakness
  • 620295 2022-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.063 Federal Pell Grant Program $2.11M
84.268 Federal Direct Student Loans $1.87M
84.425 Education Stabilization Fund $244,993
84.007 Federal Supplemental Educational Opportunity Grants $8,225
84.033 Federal Work-Study Program $3,592