Finding 48828 (2022-001)

Section 3 - Federal Award Findings and Questioned Costs Finding Reference: 2022-001 Student Financial Assistance Cluster ? Federal Direct Loan Program (ALN 84.268) U.S. Department of Education Special Tests and Provisions ? Direct Loan Reconciliations (Significant Deficiency) Criteria: A school that participates in the Direct Loan Program is required to reconcile cash (funds it received from the G5 system to pay its students) with disbursements (actual disbursement records) it submitted to the Common Origination and Disbursement (?COD?) system monthly (34 CFR 685.300(b)(5)). The starting point for reconciliation is the ending cash balance (?ECB?) on the School Account Statement (?SAS?) that the COD System sends to the school each month. The SAS is the Department of Education?s official record of a school?s cash and disbursement transactions. Condition and Context: During fiscal 2022, the College performed a reconciliation of disbursement records in COD to the College?s records prior to initiating Direct Loan Program draws in the G5 system. However, there was no evidence that the monthly reconciliation of the SAS to the College?s records was performed. Cause: Due to turnover within the College?s Financial Aid office, the responsibility for performing the SAS Direct Loan reconciliations had not been reassigned to current personnel. Effect: Direct Loan disbursement records submitted to the COD may not reconcile to the College?s records. Questioned Costs: None identified. Repeat Finding: No. Recommendation: We recommend that the College update its policies and procedures to include a reconciliation of the SAS to the institution?s records on a monthly basis in accordance with 34 CFR 685.300(b)(5). Views of Responsible Official: Management acknowledges the finding identified above and has separately prepared a Corrective Action Plan.