Finding 551505 (2024-002)

Finding No.: 2024 002 – Disbursements Reporting Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Pell Grant Program ALN Number: 84.063 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the 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 (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. In testing the origination and disbursement data, the auditor should be most concerned with the data ED has categorized as accepted or accepted with corrections. 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. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the 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 statues, 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). Conditions Found For six (6) out of 40 students selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 17 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For one (1) out of 40 student sample selections, the Cost of Attendance was misreported to the COD website. There was no follow-up by the University to correct the discrepancy. For three (3) out of 40 student sample selections, the transaction number did not agree between the Student Aid Report (SAR) and the COD website. Cause The cause of the condition found is insufficient review to ensure that disbursement reporting is occurring on a timely basis, all records submitted to COD were accepted, and, for those that were rejected, that corrected data is submitted within the required timeframe. Possible Asserted Effect The possible effect of the condition found is that the University may not be reporting Pell disbursements to COD completely, accurately, and in a timely manner. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding and notes there were issues with the disbursement records that prevented them from being sent to COD. Unexpected turnover in the workforce resulted in 25% normal processing capacity during the timeframe in question. Staffing levels in that area have been fully restored with appropriate training to the employees. A formal schedule has been developed whereby records are reconciled and sent to COD on a weekly basis to reduce the risk of late filings. In addition, the University is considering methods of improved redundancy and backup to prevent systemic issues going forward.