Finding 539593 (2024-001)

FINDING 2024-001 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See table in "Schedule of Findings and Questioned Costs"). Criteria – 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that: (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. Condition/context: A sample of 20 federal aid recipient students was selected from system generated reports of students who graduated, withdrew, or dropped during the 2023-2024 academic year. The enrollment information per the College’s records were compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes. All 20 of the students selected as samples were not reported to the NSLDS within the required timeframe. Cause: Capacity constraints and turnover within the accounting department limited the College’s ability to implement proper oversight of enrollment reporting. Effect or potential effect: The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by the Department of Education, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the College timely notify NSLDS of any changes of students’ status such as, graduation, address change, etc. We recommend that the College updates NSLDS for any graduations within the 30-day requirement or include in a roster file within 60 days. Corrective Action Plan: The College has accepted Moss Adams’ recommendation that the College document and implement processes to ensure timely NSLDS reporting. The College is in the process of restructuring the staffing in the financial aid office to update NSLDS for any students’ status changes. The College will address the deficiency by first reviewing and revising existing procedures and policies and then implementing and documenting new processes and policies to ensure proper controls and best practices. The College has already created a document that identifies all the reclassifications needed to produce the College’s Financial Statements. Condition/context: During the course of our audit, we noted that the College lacks digital transformation and automation on all significant accounting processes. With the absence of automation and documentation of financial reporting procedures, the College is unable to complete certain processes because it is such a manual process. Each of these internal control deficiencies on their own do not rise to the level of a significant deficiency; however, in the aggregate they were determined to represent a significant deficiency in financial close and reporting. Current year status – Fully corrected.