Finding 559997 (2024-002)

Finding 2024-002: Reporting: Pell Grant Disbursement Data Federal Program Student Financial Assistance Cluster (SFA): Federal Pell Grant Program – ALN 84.063 Federal Agency Department of Education Federal Award Number Award numbers: N/A Federal Award Year July 1, 2023, through June 30, 2024 Finding Type Significant deficiency and other noncompliance Criteria or Requirement In the management and reporting of Pell Grants, institutions must submit Pell Grant origination records and disbursement records to the U.S. Department of Education Common Origination & Disbursement (COD) system. 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. The disbursement record reports the actual disbursement date and the amount of the disbursement. Additionally, in accordance with federal requirements, the University shall maintain internal controls over federal programs designed to provide reasonable assurance that transactions are executed in compliance with federal statutes, regulations, and the terms and conditions of the federal award that could have a direct and material effect on a federal program. Condition Found, including Perspective In our testing over reporting of Pell Grant disbursement data for the year, we identified a total of twenty- three late submissions of the forty samples reviewed. Possible Cause and Effect The University’s internal control over compliance with reporting Pell Grant disbursement data was not operating consistently through fiscal year 2024, including the timely submission of records. The late submissions occurred when submission files were submitted to COD and received errors. The University Student Financial Services group typically performs disbursement reconciliations every seven days wherein these errors are corrected, however, this schedule was not followed during the fiscal year 2024 due to staff turnover and shortages. The University also historically relied upon a manual process to submit winter Pell awards to the COD system. This led to incorrect sequencing of the Pell awards and resulted in the rejection of these awards when submitted to the COD system. In correcting the winter Pell award process and transitioning to a system-delivered process for summer Pell reporting, transmission was rejected because of a sequencing issue which delayed the summer Pell reporting. Failure to implement sufficient internal controls to verify the University submits Pell Grant disbursement data in accordance with federal regulations increases the risk of noncompliance. Questioned Costs No questioned costs were identified. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year No Recommendation We recommend the University enhance its internal control over compliance with the federal regulations related to reporting of Pell Grant disbursement data. The University should maintain an appropriate level of staffing to properly perform timely reporting of Pell Grant disbursement information to the COD system. The University should also align the internal control process of reporting Pell Grant disbursement data regardless of semester to eliminate manual errors. Views of Responsible Officials The University agrees with the finding. These late reporting stemmed from two issues. The fall and spring delays were related to errors in the reporting file, which caused the disbursements to fail in processing through the COD via the electronic batch process. The Student Financial Services team identified these errors during their reconciliation process, generally completed weekly. However, during part of the last academic year, this schedule was not consistently followed due to staffing issues. In addition to the fall and spring delays, there were delays in reporting summer Pell disbursements. This delay was directly related to correcting the University’s self-identified issue with the awarding and disbursement of funds during the Winter term related to Finding 2024-001. The University has corrected the processing of Pell during the winter term which will eliminate the sequencing issue. Additionally, the University has implemented electronic batch processing to COD for the summer term and addressed staffing issues to ensure that the reconciliation process continues on a weekly basis.