Finding Text
Assistance Listing Number. Federal Agency, and Program Name - 84.268, U.S. Department of Education, Federal Direct Student Loans
Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes - 2022-002
Criteria - The Seminary is required to perform monthly reconciliations of federal funding received between the Department of Education's records through the Common Origination and Disbursement (COD) and the Seminary's records. The Seminary is also required to have a formal review process in place to ensure the reconciliations are accurate and performed timely in accordance with 34 CFR 685.102(b), 685.301, and 303. Finally, the Seminary should have a quality assurance system in place in accordance with CFR 685.300(b)(9).
Condition - During our review of internal controls and testing procedures, it was noted that there was no evidence that reconciliations were performed or reviewed during the fiscal year. In addition, the Seminary does not have a quality assurance system in place.
Questioned Costs - None
Identification of How Questioned Costs Were Computed - N/A
Context - Due to the lack of reconciliations performed, no reconciliations were tested. In addition, the quality assurance system was not in place.
Cause and Effect - The lack of maintaining and review of monthly reconciliations and lack of a quality assurance system could lead to differences between amounts reported to the Department of Education and amounts disbursed to the students that could go unidentified for a period of time.
Recommendation - We recommend that policies be put in place to ensure reconciliations are maintained and that a formal review process be implemented and documented. In addition, we recommend that a quality assurance process be documented and implemented to ensure compliance with loan programs.
Views of Responsible Officials and Planned Corrective Actions - Within one to two weeks of each month's end, the financial aid director requests a report from COD (U.S. Department of Education Common Origination & Disbursement) for direct loans disbursed that month. That report is retrieved through EDConnect and reviewed. The financial aid director generates a report from Jenzabar Financial Aid system of direct loans disbursed for that month. The financial aid director also retrieves a report of direct loans applied to students' accounts for that month from the business office senior accountant. These three reports are then compared and reconciled for each month.