Finding Text
(1) Summary of Auditors’ Results
a. Type of report issued on whether the financial statements were prepared in accordance with generally
accepted accounting principles: Unmodified
b. Internal control deficiencies over financial reporting disclosed by the audit of the financial statements:
• Material weaknesses: No
• Significant deficiencies: None Reported
c. Noncompliance material to the financial statements: No
d. Internal control deficiencies over major programs disclosed by the audit:
• Material weaknesses: No
• Significant deficiencies: Yes – See Finding 2023-001
e. Type of report issued on compliance for major programs: Unmodified
f. Audit findings that are required to be reported in accordance with 2 CFR 200.516(a): Yes
g. Major program:
• Student Financial Assistance Cluster – various Federal Assistance Listing numbers
h. Dollar threshold used to distinguish between Type A and Type B programs: $750,000
i. Auditee qualified as a low-risk auditee: Yes
(2) Findings Relating to the Financial Statements Reported in Accordance with Government Auditing
Standards
None.
(3) Findings and Questioned Costs Relating to Federal Awards
Finding Number: 2023-001
Federal Agency: U.S. Department of Education
Program: Federal Direct Loan Program
Federal Assistance Listing Numbers: 84.268 Criteria
Per CFR 200 Part 5 Student Financial Statement Assistance Cluster, institutions request funds from the
Education Department under the advance, reimbursement, or heightened cash monitoring payment
methods. The University utilizes the reimbursement payment method. Under this method an institution is
required to credit the student’s account with the eligible amount of funds and pay any remaining credit
balances before seeking reimbursement from the Department of Education (ED). The reimbursement
request must be accompanied by supporting documentation for the disbursed funds. Once the
reimbursement request is approved, ED will transfer the funds electronically to the institution’s account.
Condition
The University submitted a reimbursement request for the Federal Direct Loan Program for
November 2022 that was greater than the amount of funds disbursed for the period. The Financial Aid
Office identified this error after the drawdown of funds occurred. After the identification of this error, the
University issued a refund to ED in the amount of $1,987,716. However, there was a period during which
the University had overdrawn its Federal Direct Loan Program funds.
Cause
The University’s cash management process did not include a requirement to review the reimbursement
request before it was processed.
Effect
If appropriate controls are not designed and operating effectively over the cash management process,
reimbursement requests may be submitted that are in excess of funds disbursed for the time period.
Questioned Costs
None Noted
Statistical Sampling
The sample was not intended to be and was not a statistically valid sample.
Prior Year Finding
No.
Recommendation
We recommend that the University perform and document a review of reimbursement submissions before
they are processed to ensure that reimbursement requests are not in excess of funds disbursed for the
period. Management Views
After the identification of the error in the Federal Direct Loan reimbursement request for November 2022,
the University implemented a review requirement. The Director of Tax and Financial Reporting or the AVP,
Controller must review the reimbursement request calculated by the Assistant Controller and Director of
Grant Accounting before it can be processed. As of June 30, 2023, this review requirement was fully
implemented.