Finding 5743 (2023-002)

Eligibility Type of Finding - Noncompliance with Eligibility compliance requirement and material weakness in internal control over compliance Program: Student Financial Assistance Cluster Assistance Listing Number: Federal Pell Grants 84.063, Federal Direct Loans 84.268 Federal Agency: U.S. Department of Education Criteria - 34 CFR 690.62 provides regulations to institutions to calculate an eligible student’s Federal Pell Grant. 34 CFR 685.200 provides regulations to institutions to determine eligibility and states that a Direct Subsidized Loan borrower must demonstrate financial need. The institution should have sufficient internal controls over compliance with direct and material compliance requirements to prevent or detect and correct material noncompliance in a timely manner. Condition - Two errors were identified when testing the amount awarded for Federal Pell Grants and Federal Direct Loans. One student was awarded an incorrect Federal Pell Grant amount. The student was awarded $6,845 when the student was eligible for $6,895. This resulted in an under-award of $50. One student was awarded a subsidized Federal Direct Loan when there was no available need for a subsidized loan. The student was awarded $2,346 in subsidized loans. Cause - A material weakness in internal control over compliance exists relating to eligibility. The internal controls over the review of awarded aid was not effective at preventing or detecting and correcting noncompliance with the requirements. Effect - Incorrect award amounts could go undetected resulting in an under- or over-award of student financial assistance and/or awarding student financial assistance to students that are ineligible for such assistance. Questioned Costs - The two errors identified within our forty-item sample resulted in an under-award of $50 for a Pell recipient and an over-award of $2,346 for a recipient of subsidized Federal Direct Loans. Context - Two students were under- or over-awarded aid out of a sample of 40 students. Identification as a Repeat Finding - Not Applicable. Recommendation - The review of amounts awarded should be sufficiently detailed to detect and correct inappropriately awarded funds. A detailed review of amounts awarded and information supplied by the student should be thoroughly reviewed prior to disbursement of student financial assistance. Views of Responsible Official - Management concurs with the finding and is providing those responsible for compliance with appropriate education on the compliance requirements. The College is reviewing the processes and controls and will make changes as necessary to prevent and/or detect and correct noncompliance on a timely basis.