Finding 504085 (2023-006)

-
Requirement
E
Questioned Costs
$1
Year
2023
Accepted
2024-10-29
Audit: 326482
Organization: Cottey College (MO)
Auditor: Sikich CPA LLC

AI Summary

  • Core Issue: Two students did not receive the full amount of their Federal Direct Subsidized Loans, indicating a compliance failure with eligibility requirements.
  • Impacted Requirements: The issue relates to the maximum borrowing limits for undergraduate students under the Direct Subsidized Loan Program.
  • Recommended Follow-Up: Cottey College should review and improve its policies and procedures to ensure accurate distribution of Title IV aid.

Finding Text

2023-006 Student Financial Aid Cluster (a) Federal Supplemental Educational Opportunity Grant (b) Federal Work Study Grant (c) Federal Pell Grant Program (d) Federal Direct Loan Program, Assistance Listing No. (a) 84.007 (b) 84.033 (c) 84.063 (d) 84.268 - Year Ended June 30, 2023 Criteria: In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following: $5,500 for a program of study of at least an academic year in length (34 CFR 685.203). Condition: During our testing of thirty-seven student files, we noted two individuals (5%) did not receive the full amount of their Federal Direct Subsidized Loans. We consider this condition to be an instance of non-compliance relating to the Eligibility compliance requirement. Statistical sampling was not used in making sample selections. Questioned Costs: $5,436 Cause and Effect: Without proper review of eligibility of financial aid, students may receive an incorrect amount of Title IV aid. The result is students received unsubsidized loans prior to receiving full subsidized loans. Recommendation: We recommend Cottey College evaluate policies and procedures to ensure students receive the proper amount of Title IV aid. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.

Corrective Action Plan

2023-006 Student Financial Aid Cluster (a) Federal Supplemental Educational Opportunity Grant (b) Federal Work Study Grant (c) Federal Pell Grant Program (d) Federal Direct Loan Program, Assistance Listing No. (a) 84.007 (b) 84.033 (c) 84.063 (d) 84.268 - Year Ended June 30, 2023 Condition: During our testing of thirty-seven student files, we noted two individuals (5%) did not receive the full amount of their Federal Direct Subsidized Loans. We consider this condition to be an instance of non-compliance relating to the Eligibility compliance requirement. Statistical sampling was not used in making sample selections. Corrective Action Plan: During the 2022-23 school year, an employee who retired in May 2023 awarded all returning student institutional aid and federal aid. Upon her retirement, Hannah Masters, Executive Director of Financial Aid and Student Accounts, took over awarding all students (incoming and returning students). Starting in June 2023, Hannah awards all students based on enrollment status from Jenzabar 1 (Cottey's ERP) for returning students and Salesforce for incoming students. Then on census date, the Registrar sends an updated final report of student grade level and attempted credit hours. Hannah then reviews all student accounts manually and confirms the enrollment, grade level, and loan levels for each student. This ensures no student is under or over awarded for the term based on grade level or financial need. With the staffing changes, we are also now reviewing each package every time a FAFSA update is imported. This gives us another round of reviews to ensure students are not over or under awarded based on financial need. Responsible Person for Correction Action Plan: Hannah Masters Implementation Date for Corrective Action Plan: June 2023

Categories

Questioned Costs Student Financial Aid Eligibility Matching / Level of Effort / Earmarking

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $1.17M
84.063 Federal Pell Grant Program $705,134
84.033 Federal Work-Study Program $29,746
84.007 Federal Supplemental Educational Opportunity Grants $25,644