Finding 48446 (2022-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-20

AI Summary

  • Core Issue: The Center failed to document reconciliations between its records and Direct Loan funds for all drawdowns, leading to potential discrepancies.
  • Impacted Requirements: Noncompliance with 34 C.F.R. § 685.300(b)(5), which mandates monthly reconciliations of institutional records with Direct Loan funds.
  • Recommended Follow-Up: Implement procedures for thorough reconciliations of each cash drawdown and maintain documentation; investigate and resolve any identified variances promptly.

Finding Text

Direct Loan Reconciliation ? Noncompliance/Material Weakness Finding Number: 2022-001 Assistance Listing Number and Title: AL # 84.063 and 84.268 Student Financial Assistance Cluster Federal Award Identification Number / Year: None / 2022 Federal Agency: US Department of Education Compliance Requirement: Special Tests and Provisions ? Direct Loan Reconciliation Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No 34 C.F.R. ? 685.300(b)(5) states on a monthly basis, reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary. As the Center only has nine drawdowns during the fiscal year, the Center performs a reconciliation for each drawdown. For three out of three (100%) drawdowns tested, we noted the Center did not maintain documentation the Center's Achademix System was reconciled to the Common Origination and Disbursement (COD) System at the time of the drawdown. Additionally, the Cash Activity report within the Common Origination and Disbursement System after the May 11, 2022 drawdown reflects a variance of $866 within the "Cash>Net Accepted & Posted Disbursements", therefore indicating a difference between the accepted drawdowns and posted drawdowns. As of January 19, 2023, this variance is still reflected within the Common Origination and Disbursement (COD) System. Failure to maintain documentation that reconciliations were performed as required could result in discrepancies being undetected and unresolved timely. The Center should implement procedures to ensure a reconciliation is performed for each cash drawdown and proper documentation is maintained as proof a reconciliation was performed. When variances are identified, the Center should investigate the reason for the discrepancies and timely resolve them.

Corrective Action Plan

Finding Number: 2022-001 Planned Corrective Action: Mid-East's Adult Education Financial Coordinator retired at the end of Fiscal Year 2021. As any new position, there was a learning curve and the new Financial Aid Coordinator received limited training with the former Coordinator. Consultants were hired to help, but this specific reconciliation process was not discussed. There has been a recent change in the Adult Education Director's position, and it is the intention of the new Director to eventually cross-train positions. This will assist in the future for a smoother transition between employees leaving and new employees hired. Since the finding, the Adult Education Financial Coordinator has established a checklist of items that need to be completed for each drawdown. This checklist will be placed in each drawdown folder. The Monthly Drawdown Reconciliation plan will include beginning with verifying with Common Origination and Disbursement Center (COD) School Summery report prior to the disbursement. Once the disbursement information is entered into Ed-Express and transferred to COD for the month review of the School Summary report, it will be reviewed to verify that the "Cash>Net Accepted & Posted Disbursements" matches the Achademix Drawdown Batch. Then, again when the disbursement funds are disbursed, a review of the COD School Summary report will occur. At any time, if a variance occurs, it will be addressed immediately. This plan of action went into place with the February 17, 2023 disbursement process. All documentation of any reconciliations will be kept in each drawdown file. The variance of the $866.00 occurred during the final drawdown of Fiscal Year 2022. As the reconciliation process was not in place, the variance was not discovered. As a new Fisca Year started, it was a new batch of funds, and the $866 variance was not discovered until the audit process. The variance was researched and corrected. The correction was located and corrected in Ed Express and had no monetary effect. The School Summary report from COD Cash>Net Accepted & Posted Disbursements" is at zero for 2021-2022, and documentation has been kept on that. The newly implemented checklist and process for reconciliation will prevent variances from happening in the future. Anticipated Completion Date: Currently in place and will continue. Responsible Contact Person: Thasia Shilling, Adult Education Financial Aid Coordinator

Categories

Special Tests & Provisions Student Financial Aid Subrecipient Monitoring Cash Management Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 48447 2022-001
    Material Weakness
  • 624888 2022-001
    Material Weakness
  • 624889 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $755,033
84.048 Career and Technical Education -- Basic Grants to States $643,852
84.425 Covid - 19 Higher Education Emergency Relief Fund - Heerf Institutional Portion $498,660
84.063 Federal Pell Grant Program $441,347
10.555 National School Lunch Program $417,459
84.425 Covid - 19 Higher Education Emergency Relief Fund - Heerf Student Aid Portion $354,650
84.002 Adult Education - Basic Grants to States $106,371
10.553 School Breakfast Program $95,163
84.425 Covid - 19 Governor's Emergency Education Relief Fund - Geer I and II $73,108
84.425 Covid - 19 Governor's Emergency Education Relief Fund - Geer II $66,931
10.555 Covid-19 National School Lunch Program $61,916
10.558 Child and Adult Care Food Program $14,635
10.649 Covid-19 Pandemic Ebt Administrative Costs $614