Finding Text
Finding 2022-003: Significant Deficiency - Lack of Documented Review of Controls Federal Program - Student Financial Assistance Cluster Federal Agency - U.S. Department of Education Pass-Through Entity - Not Applicable Assistance Listing Number - Various Federal Award Number - Various Federal Award Year - June 30, 2022 Criteria: Department of Education regulations require recipients of federal awards to administer its federal programs with an adequate system of internal controls over applicable compliance requirements. In order to ensure the accuracy of key student financial assistance processes, a proper system of review should be in place where the work of one is reviewed by someone who is not the original preparer. The review process should be documented. Condition: Various key student financial assistance processes, such as monthly Direct loan reconciliations and drawdowns of federal funds, have been performed, but there is no evidence of documented reviews. In addition, it was noted that the servicer's internal control report for the Perkins Loan Program was not reviewed. The sample was not a statistically valid sample. Cause: There was turnover during the year which resulted in a lack of documented reviews. Effect: Errors related to student financial assistance processes could occur and not be detected in a timely manner by employees in the normal course of performing their assigned functions. Questioned costs: Not applicable. Context: There was a lack of documentation of review for the samples selected for Direct loan reconciliations, drawdowns of federal funds, and R2T4 calculations. In addition, there was no documentation of the servicer's report for the Perkins Loan Program. Recommendation: We recommend that procedures and policies are put in place to ensure controls over student financial assistance processes are documented, including review by someone other than the preparer. Management Response: The Business Office at Doane University has implemented procedures to document the secondary review processes and review of servicer reports.