Finding 504090 (2023-008)

-
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: One student received $1,969 more than the allowed maximum for Federal Direct Subsidized Loans due to non-compliance with eligibility criteria.
  • Impacted Requirements: Federal regulations prohibit exceeding $23,000 in loans for students who haven't completed their undergraduate program.
  • Recommended Follow-Up: Cottey College should reclassify the excess amount from subsidized to unsubsidized loans to correct the error.

Finding Text

2023-008 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: A student who has not successfully completed a program of study at the undergraduate level may not receive Federal Direct Subsidized Loans in excess of $23,000 (34 CFR 682.204). Condition: During our testing of thirty-seven student files, we noted one individual (2.7%) received an excess of $1,969 over the maximum undergraduate level of $23,000 in 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: $1,969 Cause and Effect: Without proper review of eligibility of financial aid, students may receive an incorrect amount of Title IV aid. The result is a student received ineligible loan proceeds. Recommendation: We recommend Cottey College reclassify $1,969 from subsidized to unsubsidized. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.

Corrective Action Plan

2023-008 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 one individual (2.7%) received an excess of $1,969 over the maximum undergraduate level of $23,000 in Federal Direct Subsidized Loans. 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. 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