Finding 613423 (2022-001)

-
Requirement
C
Questioned Costs
$1
Year
2022
Accepted
2022-11-09
Audit: 28019
Organization: Coe College (IA)
Auditor: Rsm US LLP

AI Summary

  • Core Issue: The College failed to return excess Federal Direct Student Loan and COVID-19 Stabilization funds on time.
  • Impacted Requirements: Violated federal regulations requiring funds to be disbursed or returned within three business days.
  • Recommended Follow-Up: Management should ensure timely returns of excess federal funds to comply with regulations.

Finding Text

2022-001 U.S. Department of Education Student Financial Assistance Programs Cluster Federal Direct Student Loan Program (Federal Assistance Listing Number 84.268) and COVID-19 Education Stabilization Fund ? ARPA Student Portion (Federal Assistance Listing Number 84.425F) Federal Award Year: 2021-2022 Finding: The College did not return excess Federal Direct Student Loan funds and the student portion of COVID-19 Education Stabilization funds within the required timeframe. Criteria: Per 34 CFR 668.162(b)(3), an institution must disburse the funds required as soon as administratively feasible, but no later than three business days by the institution. Per 34 CFR 668.166(a) and (b), an excess cash balance tolerance is allowed if that balance is less than 1% of its prior year drawdowns and is eliminated within the next seven calendar days. Condition: The College drew down excess Federal Direct Student Loan funds and the student portion of COVID-19 Education Stabilization funds that were not properly disbursed to students or returned to the Department of Education within the required timeframe. Cause: The Business Office was not aware the excess funds related to the Federal Direct Student Loan program were on hand until the month-end reconciliation process, which was beyond the refund period. In regards to the student portion of COVID-19 Education Stabilization funds, there were 8 checks that were issued to students during 2021 and not cashed, and therefore subsequently being cancelled during 2022, resulting in the excess funds on hand. Effect: Funds were drawn in excess of disbursed funds and the funds remained in excess beyond the allowed days. Context: Two of 32 drawdowns. Questioned costs: $5,224 of excess cash draw related to Federal Direct Student Loan funds and $3,776 of excess cash related to the student portion of COVID-19 Education Stabilization funds that were returned to the Department of Education after the required timeframe. Recommendation: Management should review and verify federal funds requested in excess are timely returned to the Department of Education in order to comply with federal regulations. Views of responsible officials: Management agrees with this finding. Please see corrective action plan attached.

Categories

Questioned Costs Cash Management Matching / Level of Effort / Earmarking

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $8.76M
84.038 Federal Perkins Loan Program, Beginning Loan Balance $3.49M
84.063 Federal Pell Grant Program $2.39M
84.425 Education Stabilization Fund $1.39M
84.042 Trio_student Support Services $304,757
84.033 Federal Work-Study Program $229,317
84.007 Federal Supplemental Educational Opportunity Grants $185,919
47.076 Education and Human Resources $88,650
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $49,317
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $33,089
47.049 Mathematical and Physical Sciences $23,346