Finding Text
Finding 2023-005– Student Financial Assistance Cluster Internal Control over Compliance
Repeat Finding: No
Federal Program Title – U.S. Department of Education
Student Financial Assistance Cluster
Federal Direct Student Loans: 84.268
Federal Pell Grant Program: 84.063
Federal Work-Study Program: 84.033
Federal Supplemental Educational Opportunity Grants: 84.007
Federal Award Year 2022-2023
Condition
City Colleges did not have sufficient documentation that internal controls were in place and operating effectively relative to the following areas:
• Allowable Activities: For each of the seven campuses, City Colleges did not have sufficient supporting evidence that review controls were performed over the transfer, carryforward, carryback, and administrative cost calculations in the Fiscal Operations Report and Application to Participate (FISAP) for award year July 1, 2021 through June 30, 2022 submitted during fiscal year 2023.
• Reporting: For each of the seven campuses, City Colleges did not have sufficient supporting evidence that secondary review controls were performed over FISAP data for award year July 1, 2021 through June 30, 2022 submitted during fiscal year 2023.
Criteria
2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure the review and approval controls over allowable activities, eligibility and reporting compliance requirements are sufficiently documented.
Questioned Costs
There were no questioned costs with respect to this finding.
Cause
City Colleges did not formally document the additional reviews and approvals over the department’s review of the FISAP.
Effect
For allowable activities, the lack of properly documented reviews in carryforward, carryback, and administrative cost calculations could result in errors that would impact future funding determinations. For eligibility, the lack of properly documented reviews could result in over or under awards to students which could result in loss of future funding. For reporting, the lack of properly documented reviews over the FISAP, could result in loss of future funding.
Recommendation
We recommend City Colleges implement controls to ensure that sufficient documentation is maintained over review control associated with eligibility, allowable costs and reporting.
Views of responsible officials
We agree with this finding. See corrective action plan.