Finding Text
U.S. Department of Education Student Financial Aid Cluster:
ALN: 84.063 Pell Grant
ALN: 84.007 Supplemental Educational Opportunity Grant
ALN 84.033 Federal Work Study
ALN 84.038 Federal Perkins Loan Program
ALN 84.268 Federal Direct Student Loans
Criteria: The 2023-2024 Federal Student Aid Handbook, Vol 2, Chapter 3, states that the Financial Aid Administrator must be supported by an adequate number of professional and clerical personnel. The number of staff that is adequate depends on the number of students aided, the number and types of programs in which the school participates, the number of applicants evaluated and processed, the number of funds administered, and the type of financial data delivery system the school uses. Internal controls that pertain to Eligibility and Special Tests and Provisions include the accuracy and completeness of data used to determine eligibility requirements, which are reviewed and agreed to support as necessary by staff and reviewed by a knowledgeable supervisor. Manual checklists or automated processes used when making eligibility determinations are reviewed and approved by a knowledgeable supervisor. Calculations of amounts to be received for or on behalf of participants are reperformed by a knowledgeable supervisor. Segregation of duties exists between those determining a participant’s eligibility and those reviewing/approving eligibility.
Condition: During the audit, inadequate internal control procedures were in place for the Student Financial Aid programs for reviewing the financial aid award packages for Eligibility and return of funds calculations for Special Tests and Provisions. This function was performed only by the Financial Aid Director, with no indication of review.
Context: For most of the audit period, the Financial Aid Director was the only staff member in the department.
Effect: Noncompliance with the Federal Student Aid Handbook for adequate staffing. There is the risk of errors in calculating financial aid award packages and return of funds calculations when there are inadequate internal controls.
Questioned Costs: None.
Cause: The University's Financial Aid Department was understaffed and did not develop alternative control activities to accommodate the staff size.
Auditor Recommendation: We recommend the University evaluate and determine if additional staff members need to be hired and implement adequate internal controls over the Student Financial Aid program.
University Response: The University of Providence acknowledges the finding related to internal control procedures in the Financial Aid Department. We take compliance with federal guidelines and ensuring the accuracy of financial aid processes seriously. It is important to note that during the audit period, the University of Providence was short one staff member in the department, a position which has now been filled. Corrective actions taken or planned is as follows:
1. Evaluate Opportunity for Staffing Enhancements:
The University will create a working group to evaluate the possibility of adding staff within the Financial Aid Department to ensure adequate segregation of duties and adherence to federal requirements. If this is not possible due to budgetary constraints, the VPEM and Director of Financial Aid will explore opportunities to leverage existing support resources within the University to meet the same goal.
2. Implementation of Internal Control Procedures:
o Eligibility Determinations: Manual and automated processes for determining eligibility will be reviewed by designated staff members and supervised by a senior-level administrator (Vice President for Enrollment Management) on a semester basis, to ensure compliance with federal guidelines.
o Return of Funds Calculations: Return of funds calculations will undergo a dual-review process each semester by the VPEM to mitigate the risk of errors.
3. Training and Documentation:
The Financial Aid team will continue to undergo annual training to stay updated on the Federal Student Aid Handbook's requirements. Comprehensive documentation of processes and supervisory review checklists will be implemented to support compliance and maintain transparency.
Commitment to Compliance: The University of Providence is committed to maintaining the integrity of our financial aid processes and ensuring compliance with all federal regulations. We will take the necessary steps to rectify this finding and prevent recurrence in future audit periods. Should further information be required, the University is prepared to provide additional details and updates on our progress.