Finding 570428 (2023-004)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2025-07-02
Audit: 361393
Organization: College of Micronesia - Fsm (FM)
Auditor: Ernst & Young

AI Summary

  • Core Issue: The College used outdated cost of attendance data and applied full-time status uniformly, leading to potential inaccuracies in student financial awards.
  • Impacted Requirements: Institutions must submit accurate origination records to the COD system, reflecting current costs and individual enrollment statuses.
  • Recommended Follow-Up: Implement a systematic review process to ensure origination records are updated and accurate before submission.

Finding Text

Finding No.: 2023-004 Federal Agency: U.S. Department of Education AL Program: Student Financial Assistance Cluster - 84.063 Federal Pell Grant Federal Award No.: Title IV HEA Program OPE ID 01034300 Area: Reporting Questioned Costs: $--- Criteria: Institutions are required to submit 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. Origination records include the student information such as Social Security number, award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and Condition: For all 40 origination records tested, the College reported the cost of attendance from the SY2021- 2022 handbook. The current cost of attendance, as per the SY2022-2023 handbook, exceeds the amounts reported in the origination records. Additionally, the College did not consider the applicant's enrollment status (full-time, three-fourths-time, half-time, or less than half-time) when determining the cost of attendance; instead, it applied full-time status uniformly to all applicants. Cause: The discrepancies identified in the origination records stem from lack of systematic review and update processes for financial aid records. Effect: The reliance on outdated cost of attendance data and the uniform application of full-time status may lead to incorrect calculation of financial awards to students. Recommendation: The College should establish a systematic process for reviewing and updating the origination records prior to submission to COD System. Views of responsible officials The College acknowledges the finding. Refer to their corrective action plan.

Corrective Action Plan

Finding No.: 2023-004 Recommendation The College should establish a systematic process for reviewing and updating the origination records prior to submission to COD System. Response The College acknowledges the audit finding regarding the use of outdated cost of attendance (COA) figures and the uniform application of full-time enrollment status in COD origination records for the 2022–2023 academic year. In response, the Financial Aid Office (FAO) is committed to strengthening its policies and procedures to ensure accuracy, compliance, and proper stewardship of the Title IV funds. To this end, the College will implement the following corrective actions: 1. Policy and Procedure Enhancement a. The FAO will develop and implement a formal Standard Operating Procedure (SOP) for COD reporting. This SOP will include: • A COA validation checklist to ensure the correct, current year COA from the approved financial aid handbook is applied. • The college has continuously considered the applicants’ enrollment status (full-time, ¾-time, half-time, or less-than-half-time) when determining the cost of attendance and awards but publishes only one cost of attendance for full time for the purpose of illustration. Hence, the college will start publishing all COA for all enrollment categories in the student financial aid handbook as a published guideline for awarding • A timeline that aligns record origination with student registration/enrollment confirmation to minimize errors and fully utilize the published Pell Recalculation Date (PRD) in the student financial aid handbook b. The SOP will be reviewed annually. 2. Staff Training and Certification a. FAO staff will participate in mandatory annual internal training and refresher workshops on the EDExpress system, COD reporting procedures, and Title IV compliance. The first round of enhanced training will be completed by August 30, 2025]. Staff will also complete Federal Student Aid (FSA) training modules related to COD and verification processes to ensure understanding of federal expectations and system updates. 3. Manual Data Verification Protocol • The Financial Aid Office (FAO) will implement a structured manual data verification protocol to ensure accuracy when transferring information from the Student Information System (SIS) to EDExpress. This protocol will include: Use of pre-submission checklists to verify each student’s cost of attendance (COA), enrollment status, and other required data fields against the official records in the SIS. • Designated FAO staff will perform a two-tiered review process, where one staff member enters data and another independently verifies accuracy prior to COD submission. • Maintenance of record logs for each batch of COD submissions, documenting the review steps taken and any discrepancies corrected before submission. 4. Oversight and Accountability a. The Director of the Financial Aid Office (FAO) will be responsible for monitoring adherence to COD reporting requirements to ensure accuracy and compliance. This includes tracking staff training completion related to EDExpress and Title IV regulations, conducting quarterly internal reviews of origination and disbursement records, and verifying the correct use of current cost of attendance figures and enrollment status classifications. The Director will document findings, implement corrective actions as needed, and provide quarterly progress reports to the Vice President for Enrollment Management and Student Services (VPEMSS). Contact: VPEMSS Completion Date: September 30, 2025

Categories

Student Financial Aid Reporting

Other Findings in this Audit

  • 570429 2023-005
    Significant Deficiency
  • 570430 2023-006
    Material Weakness
  • 570431 2023-007
    Material Weakness
  • 570432 2023-008
    Material Weakness
  • 570433 2023-009
    Significant Deficiency
  • 570434 2023-009
    Significant Deficiency
  • 570435 2023-009
    Significant Deficiency
  • 570436 2023-009
    Significant Deficiency
  • 570437 2023-009
    Significant Deficiency
  • 1146870 2023-004
    Significant Deficiency
  • 1146871 2023-005
    Significant Deficiency
  • 1146872 2023-006
    Material Weakness
  • 1146873 2023-007
    Material Weakness
  • 1146874 2023-008
    Material Weakness
  • 1146875 2023-009
    Significant Deficiency
  • 1146876 2023-009
    Significant Deficiency
  • 1146877 2023-009
    Significant Deficiency
  • 1146878 2023-009
    Significant Deficiency
  • 1146879 2023-009
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.063 Federal Pell Grant Program $9.33M
84.425 Education Stabilization Fund $1.26M
10.511 Smith-Lever Extension Funding $772,212
15.875 Economic, Social, and Political Development of the Territories $671,227
84.047 Trio Upward Bound $596,043
11.307 Economic Adjustment Assistance $424,597
11.028 Connecting Minority Communities Pilot Program $341,775
84.044 Trio Talent Search $340,205
93.236 Grants to States to Support Oral Health Workforce Activities $289,130
10.203 Payments to Agricultural Experiment Stations Under the Hatch Act $190,567
10.322 Distance Education Grants for Institutions of Higher Education in Insular Areas $83,237
10.514 Expanded Food and Nutrition Education Program $56,096
10.308 Resident Instruction, Agriculture, and Food Science Facilities and Equipment Grants $43,325
47.076 Stem Education (formerly Education and Human Resources) $26,110