Finding 613681 (2022-001)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-02-13
Audit: 30545
Organization: Bethany College (KS)
Auditor: Rubinbrown LLP

AI Summary

  • Core Issue: The College's financial responsibility composite score is below the required 1.5, necessitating a letter of credit and heightened cash monitoring.
  • Impacted Requirements: Compliance with Federal Regulations for financial responsibility and potential scrutiny from accreditation agencies.
  • Recommended Follow-up: Implement better budget monitoring processes and evaluate cost centers to enhance fiscal efficiency and ensure compliance.

Finding Text

Finding 2022-001 - Significant Deficiency, Compliance Federal Award No. 84.007, 84.033, 84.038, 84.063, 84.268, 84.379 U.S. Department Of Education Student Financial Aid Cluster ? Special Tests and Provisions Criteria: In accordance with Federal Regulations 34 CFR 668.171, an institution administering Federal Student Financial Aid must obtain a minimum composite score of 1.5 to fulfill the requirements of financial responsibility and be above 1.0 to be considered for ?Zone Alternative? treatment. Condition: For the year under audit, the College?s financial responsibility composite score will fail to meet the numeric standard of responsibility as set by the Department of Education (ED). However, when an institution cannot meet the criteria for financial responsibility through the composite score, ED provides other ways to comply with this standard. One way the College can comply with this standard is by obtaining an irrevocable letter of credit from a bank. In addition, the College must make Federal Student Financial Aid disbursements under the heightened cash monitoring method described in 34 CFR 668.162. Context: The College?s ED financial responsibility composite fell below 1.0 in previous years and was between 1.0 and 1.5 in the past two fiscal years. The College has not been able to bring its score above 1.5, therefore will continue to have to obtain a letter of credit and follow heightened cash monitoring procedures. Effect: The College will have to obtain a letter of credit and follow heightened cash monitoring procedures. Additionally, the College may be required to provide further documentation of its financial plans and progress to accreditation agencies in which it may seek accreditation through. Questioned Costs: None noted. Cause: Bethany College does not have proper processes and related controls in place to ensure that the required financial responsibility composite score does not fall below 1.5. Indication Of Repeat Finding: This is a repeat of a finding in the immediately prior year; see Summary Schedule of Prior Audit Findings 2021-001. Recommendation: We recommend that the College implement controls and processes for monitoring budgets that include all expenses including non-cash transactions in order to adequately anticipate the revenue needed to cover the expenses of the College. We recommend that the College evaluate all of its cost centers and revenue streams to ensure that the College is maximizing fiscal efficiency while still achieving the mission of the College. Views Of Responsible Officials (Unaudited): The College has obtained the required letter of credit from a local bank and will comply with federal heightened cash monitoring requirements. The College continues to work to positively align revenues and expenses. The College regularly monitors its cash flows and expense budgets both for timing and savings. Efforts continue to increase net student revenues to reduce the need for current-year contributions and other income for operating expenses. The College will continue to carefully plan and manage institutional financial aid to yield stronger net student revenues to support operations. Anticipated Completion Date: August 2023 Contact Person: Krista Harris, Chief Financial Officer

Categories

Special Tests & Provisions Subrecipient Monitoring Significant Deficiency

Other Findings in this Audit

  • 37228 2022-001
    Significant Deficiency Repeat
  • 37229 2022-004
    Significant Deficiency
  • 37230 2022-006
    Significant Deficiency
  • 37231 2022-001
    Significant Deficiency Repeat
  • 37232 2022-003
    Significant Deficiency
  • 37233 2022-004
    Significant Deficiency
  • 37234 2022-006
    Significant Deficiency
  • 37235 2022-001
    Significant Deficiency Repeat
  • 37236 2022-006
    Significant Deficiency
  • 37237 2022-001
    Significant Deficiency Repeat
  • 37238 2022-006
    Significant Deficiency
  • 37239 2022-001
    Significant Deficiency Repeat
  • 37240 2022-004
    Significant Deficiency
  • 37241 2022-006
    Significant Deficiency
  • 37242 2022-001
    Significant Deficiency Repeat
  • 37243 2022-004
    Significant Deficiency
  • 37244 2022-006
    Significant Deficiency
  • 37245 2022-002
    Material Weakness Repeat
  • 37246 2022-005
    Significant Deficiency Repeat
  • 613670 2022-001
    Significant Deficiency Repeat
  • 613671 2022-004
    Significant Deficiency
  • 613672 2022-006
    Significant Deficiency
  • 613673 2022-001
    Significant Deficiency Repeat
  • 613674 2022-003
    Significant Deficiency
  • 613675 2022-004
    Significant Deficiency
  • 613676 2022-006
    Significant Deficiency
  • 613677 2022-001
    Significant Deficiency Repeat
  • 613678 2022-006
    Significant Deficiency
  • 613679 2022-001
    Significant Deficiency Repeat
  • 613680 2022-006
    Significant Deficiency
  • 613682 2022-004
    Significant Deficiency
  • 613683 2022-006
    Significant Deficiency
  • 613684 2022-001
    Significant Deficiency Repeat
  • 613685 2022-004
    Significant Deficiency
  • 613686 2022-006
    Significant Deficiency
  • 613687 2022-002
    Material Weakness Repeat
  • 613688 2022-005
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $4.94M
84.063 Federal Pell Grant Program $1.57M
84.425 Education Stabilization Fund - Heerf - Student Portion $1.30M
84.425 Education Stabilization Fund - Heerf - Institutional Portion $1.12M
84.038 Federal Perkins Loan Program $976,462
84.425 Education Stabilization Fund - Heerf - Strengthening Institutions Portion $179,156
84.007 Federal Supplemental Educational Opportunity Grants $167,378
84.033 Federal Work-Study Program $114,363
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $7,544