Finding 966276 (2023-005)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-03-29
Audit: 300714
Organization: Stevenson University, Inc. (MD)
Auditor: Bdo USA PC

AI Summary

  • Core Issue: The University failed to verify required information for some students selected for verification, leading to non-compliance with federal regulations.
  • Impacted Requirements: Verification procedures outlined in 34 CFR section 668.56 were not properly followed, affecting federal award disbursements.
  • Recommended Follow-Up: Enhance internal controls and verification processes; implement a two-step verification system and ensure staff are adequately trained.

Finding Text

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Verification - An institution shall require an applicant selected for verification to submit acceptable documentation that will verify or update the following information used to determine the applicant's EFC: adjusted gross income, U.S. income tax paid, aggregate number of family members in the household, number of family members in the household who are enrolled in as at least half-time students in postsecondary educational institutions if that number is greater than one and untaxed income subject to U.S. income tax reporting requirements in the base year which is included on the tax return form, excluding information contained on schedules appended to such forms. Untaxed income and benefits include: Social Security benefits if the institution has reason to believe that those benefits were received and were not reported or were not correctly reported; child support if the institution has reason to believe child support was received; U.S. income tax deductions for a payment made to an individual retirement account or Keough account; interest on tax-free bond; foreign income excluded from U.S. income taxation if the institution has reason to believe that foreign income was received; and all other untaxed income subject to U.S. income tax reporting requirements in the base year included on the tax return form, excluding information contained on schedules appended to such forms. (34 CFR section 668.56). Condition: For certain students selected for verification, the information required to be verified did not match the underlying supporting documentation. Cause: Administrative oversight and lack of sufficient internal controls with respect to verification procedures. Effect: Federal awards were not disbursed in accordance with federal regulations, and the University was not in compliance with verification compliance requirements. Questioned Costs: Sampled questioned costs: $3,645; total questioned costs: indeterminable. Context: For 4 of 25 students selected for verification testing, the University did not perform appropriate verification procedures. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2022-003 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its policies, procedures and internal controls to ensure that the appropriate verification procedures are performed for all students who are selected for verification unless excluded by the federal regulations. Views of Responsible Officials and Planned Corrective Actions: During the 2023 and 2024 fiscal years, the Financial Aid office experienced several staffing changes, including the termination of the Financial Aid Director. The newly hired staff did not receive the proper training to perform their roles effectively. This led to errors in verifying certain data when performing verification. The previous Financial Aid Director was terminated before the prior corrective action plan could be completed. In March 2023, a consultant firm was engaged to assist with the 2024 fiscal year. The Financial Aid office will implement a Quality Assurance two-step verification process. The financial aid advisor will work with the student to gather necessary documents and perform the original verification. The Associate Director of Financial Aid will review these verifications and update them in Colleague to be transmitted to COD for corrections if needed. The Financial Aid office will run a report to identify all students selected for verification for 2023-2024 and review them for accuracy. If any corrections are needed they will be updated and awards will be adjusted as needed.

Categories

Questioned Costs Student Financial Aid Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking Special Tests & Provisions Reporting

Other Findings in this Audit

  • 389821 2023-001
    -
  • 389822 2023-001
    -
  • 389823 2023-002
    Significant Deficiency Repeat
  • 389824 2023-002
    Significant Deficiency Repeat
  • 389825 2023-002
    Significant Deficiency Repeat
  • 389826 2023-002
    Significant Deficiency Repeat
  • 389827 2023-003
    -
  • 389828 2023-003
    -
  • 389829 2023-004
    - Repeat
  • 389830 2023-004
    - Repeat
  • 389831 2023-005
    Significant Deficiency Repeat
  • 389832 2023-005
    Significant Deficiency Repeat
  • 389833 2023-005
    Significant Deficiency Repeat
  • 389834 2023-005
    Significant Deficiency Repeat
  • 389835 2023-006
    -
  • 389836 2023-007
    - Repeat
  • 389837 2023-008
    Significant Deficiency Repeat
  • 389838 2023-008
    Significant Deficiency Repeat
  • 389839 2023-008
    Significant Deficiency Repeat
  • 389840 2023-009
    -
  • 389841 2023-009
    -
  • 966263 2023-001
    -
  • 966264 2023-001
    -
  • 966265 2023-002
    Significant Deficiency Repeat
  • 966266 2023-002
    Significant Deficiency Repeat
  • 966267 2023-002
    Significant Deficiency Repeat
  • 966268 2023-002
    Significant Deficiency Repeat
  • 966269 2023-003
    -
  • 966270 2023-003
    -
  • 966271 2023-004
    - Repeat
  • 966272 2023-004
    - Repeat
  • 966273 2023-005
    Significant Deficiency Repeat
  • 966274 2023-005
    Significant Deficiency Repeat
  • 966275 2023-005
    Significant Deficiency Repeat
  • 966277 2023-006
    -
  • 966278 2023-007
    - Repeat
  • 966279 2023-008
    Significant Deficiency Repeat
  • 966280 2023-008
    Significant Deficiency Repeat
  • 966281 2023-008
    Significant Deficiency Repeat
  • 966282 2023-009
    -
  • 966283 2023-009
    -

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $27.50M
84.063 Federal Pell Grant Program $4.49M
84.007 Federal Supplemental Educational Opportunity Grants $301,384
84.033 Federal Work-Study Program $271,413