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.