Finding Text
Criteria Requirement:
Institutions must submit Direct Loan and Pell origination records and disbursement records to the Common
Origination and Disbursement (COD) system. Origination records can be sent well in advance of any
disbursements, as early as the institution chooses to submit them for any student the institution reasonably
believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than 7 calendars days prior to the disbursement date under the Advance Payment method. The
disbursement record reports the actual disbursement records and returns acknowledgements to the
institution. The acknowledgements identify the processing status of each record: Rejected, Accepted with
Corrections, or Accepted. Institutions must report student disbursement data within 15 calendar days after
the institution makes a disbursement; or becomes aware of the need to make an adjustment to previously
reported student disbursement data or expected student disbursement data. Institutions may do this by
reporting once every 15 calendar days, bi-weekly or weekly or may set up their own system to ensure that
changes are reported in a timely manner.
Further, in accordance with 2 CFR 200.303(a), non-Federal entities 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 the 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 and Context:
The College disbursed Pell grant funds for students who had a C-flag on their account related to citizenship
issue on the FAFSA, which were then rejected by COD due to this citizenship issue on FAFSA.
During our audit we found one (1) of seventy-nine (79) Pell disbursements selected for testing, was not
reported to the COD website within the 15-day timeframe as required by Federal regulations. The
submission date was 27 days after the Pell grant was disbursed. Based on the College’s analysis, there
were seven (7) other students whose Pell grant disbursements were not reported to the COD website
within the required 15-day timeframe.
Cause and Effect:
The cause of the condition found was deficient internal controls over the timely submission of data
submitted to COD. Specifically, the students identified all had C-flags on their ISIR related to citizenship
issues on the FAFSA, which were not resolved prior to disbursement and as such were rejected by COD
during the reporting period until the C-flag was resolved.
The effect of the condition found is that data submitted to COD is not done timely.
Identification of Questioned Costs:
None.
Whether the Sampling was a Statistically Valid Sample:
The sample was not intended to be, and was not, a statistically valid sample.
Identification of Whether the Audit Finding was a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that the College review the policies and procedures in place for disbursing Pell grant
funds, where students have C-flags and submission of data to COD to ensure timely information is reported
to COD, as required under Federal regulations