Finding Text
Criteria or specific requirement:
Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Internal controls are not designed and operating effectively with no appropriate segregation of duties in the following areas:
1. Drawdowns for All Federal Awards – There was no control in place specifically designating the appropriate personnel who is responsible to perform the review of all drawdowns to ensure the information and amount are accurate.
2. Reconciliations of Pell Grants, Supplemental Educational Opportunity Grants (SEOG), Federal Work-Study, and Direct Loans between COD, Bank Accounts, and G5 – Reconciliations are prepared by the Associate Director of Financial Aid and reviewed by the Director of Financial Aid. There were no documentations of reviews to verify that these controls are operating effectively.
3. Federal Aid Packages – The Director of Financial Aid prepares and reviews all Federal aid packages. There was no adequate and proper segregation of duties.
4. Professional Judgement Determinations – The Director of Financial Aid prepares and reviews all professional judgement determinations. There was no adequate and proper segregation of duties.
5. Community Service Calculations for Federal-Work Study Program – The community service calculation is reviewed by the Associate Director of Financial Aid. There was no documentation of review to verify that these controls are operating effectively.
6. FISAP Report – The Director of Financial Aid prepares and reviews the FISAP report. There was no adequate and proper segregation of duties.
7. R2T4 Calculations - The Director of Financial Aid prepares and reviews the R2T4 calculations. There was no adequate and proper segregation of duties.
8. NSLDS Reporting – There is no control in place in relation to the review of the student status changes reported to NSLDS and to ensure that these are accurate and submitted timely in accordance with requirements set forth by the Department of Education.
9. Credit Balances - There is no control in place over the review of payment of credit balances to the student within 14 days.
Questioned costs: None
Context: This condition occurred in our various testing all throughout the audit of the Student Financial Aidt cluster.
Cause: Internal controls are not adequately and properly designed to address the risks. Additionally, some controls in place are not operating effectively.
Effect:
1. Internal Control deficiencies can lead to non-compliance with laws and regulations, operational inefficiencies and inaccuracies in financial reporting.
2. Improper or lack of segregation of duties can lead to increased risk of errors, fraud, and inefficiencies, as there is insufficient oversight and control.
Repeat Finding: No
Recommendation: We recommend the University review its internal controls over compliance as these are crucial in protecting the University’s assets, ensuring the accuracy of financial reporting, promoting operational efficiency, and ensuring compliance with laws and regulations.
Views of responsible officials: There is no disagreement with the audit finding.