FAC Explorer

Finding 546954 (2024-002)

Significant Deficiency
Requirement
E
Questioned Costs
$1
Year
2024
Accepted
2025-03-31
Audit: 351333
Organization: Furman University (SC)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: The University awarded subsidized loans exceeding students' actual financial need due to improper calculation processes.
  • Impacted Requirements: Compliance with federal regulations requiring accurate assessment of financial need for Direct Subsidized Loans.
  • Recommended Follow-Up: Implement additional review procedures during financial aid packaging to ensure accurate award calculations.

Finding Text

Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 Federal Direct Student Loans Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: Per CR685.200a(2)(i) a Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act. Per 20 USC CHAPTER 28, SUBCHAPTER IV, Part F: Need Analysis. Except as otherwise provided therein, for award year 2023–2024 and each subsequent award year, the amount of need of any student for financial assistance under this subchapter (except subpart 1 or 2 of part A) is equal to— (1) the cost of attendance of such student, minus (2) the student aid index (as defined in section 1087mm of this title) for such student, minus (3) other financial assistance not received under this subchapter (as defined in section 1087vv(i) of this title). Condition: The University calculated award amounts prior to applying certain scholarships to student accounts and did not update the award amounts prior to disbursing the subsidized awards to students. Questioned costs: $9,758. Context: Out of a sample of 40 students, three students were awarded subsidized award greater than their calculated remaining need. Cause: The Institution's processes and controls did not ensure the student received the proper award amount. Effect: Institution did not review the student's award packaging to ensure awards were appropriate based on the student's remaining need. This caused over awarding of subsidized loans to students which was offset by an under awarding of unsubsidized loans. Repeat Finding: No. Recommendation: We recommend that during the financial aid package review, additional procedures are put in place to ensure that student awards are appropriately calculated. Views of responsible officials: There is no disagreement with the audit finding. Management has addressed their corrective action plan in a separately issued letter.

Corrective Action Plan

Federal Eligibility Recommendation: We recommend that during the financial aid package review, additional procedures are put in place to ensure that student awards are appropriately calculated. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to the finding: The employee who committed the errors is no longer employed by Furman University. Based on federal regulations, citied in “Correcting Direct Subsidized Loan or Direct Unsubsidized Loan awarding errors” in Volume 8, Chapter 3 of the FSA Handbook: “If you discover that a student received Direct Subsidized Loan funds in excess of financial need after the student is no longer enrolled for the loan period, you are not required to take any action to eliminate the excess subsidized loan amount.” Furman University will continue to conduct regular training sessions for all financial aid counselors. These sessions focus on the latest federal and state regulations, including updates to Title IV guidelines, eligibility criteria, and documentation requirements. This ongoing training is crucial for maintaining our counselors' knowledge and effectiveness in managing financial aid processes. Furman University will perform an internal audit sample each month in conjunction with the completion of monthly reconciliations to ensure compliance with subsidized loans. Furthermore, all financial aid counselors are required to complete the “FSA Coach” training, an online resource provided by Federal Student Aid. This tool enhances their understanding of federal guidelines and best practices. To ensure future compliance, the Director of Financial Aid will conduct periodic internal audits. These audits will include a review of student files, application processes, and disbursement procedures to verify adherence to regulatory requirements. Additionally, the Director of Financial Aid will collaborate with a PowerFaids software consultant to explore the feasibility of generating specific reports that can monitor potential over awards of need-based aid. This proactive approach will help us identify and address any discrepancies promptly. Name(s) of the contact person(s) responsible for corrective action: Andrea Byrd Planned completion date for corrective action plan: 12/01/2024

Categories

Questioned Costs Student Financial Aid Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 546953 2024-001
    Significant Deficiency
  • 1123395 2024-001
    Significant Deficiency
  • 1123396 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $9.13M
84.063 Federal Pell Grant Program $1.69M
43.001 Science $447,652
84.033 Federal Work-Study Program $162,248
93.859 Biomedical Research and Research Training $101,288
94.006 Americorps State and National 94.006 $98,983
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $90,655
93.137 Community Programs to Improve Minority Health Grant Program $70,934
93.395 Cancer Treatment Research $68,436
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $67,140
11.431 Climate and Atmospheric Research $63,897
10.525 Farm and Ranch Stress Assistance Network Competitive Grants Program $57,665
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $55,521
93.304 Racial and Ethnic Approaches to Community Health $46,679
47.074 Biological Sciences $41,290
93.575 Child Care and Development Block Grant $28,781
10.215 Sustainable Agriculture Research and Education $25,271
84.027 Special Education Grants to States $22,125
12.006 National Defense Education Program $21,240
47.076 Stem Education (formerly Education and Human Resources) $20,380
84.007 Federal Supplemental Educational Opportunity Grants $14,636
93.048 Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $11,343
47.083 Integrative Activities $10,277
84.324 Research in Special Education $8,809
45.163 Promotion of the Humanities Professional Development $6,997
43.008 Office of Stem Engagement (ostem) $4,805
93.945 Assistance Programs for Chronic Disease Prevention and Control $4,379
47.049 Mathematical and Physical Sciences $2,778
15.657 Endangered Species Recovery Implementation $2,307
47.075 Social, Behavioral, and Economic Sciences $804