Finding 966996 (2023-004)

SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs June 30, 2023 Comment #2023-004 PROCEDURES GOVERNING THE RECONCILIATION AND MANAGEMENT OF FEDERAL PROGRAMS SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND HIGHER EDUCATIONAL INSTITUTIONAL AID STRENGTHENING MINORITY-SERVING INSTITUTIONS U.S. DEPARTMENT OF EDUCATION ALN# 84.031B and E, 84.382G, 84.425T (Questioned Costs - None) (Repeat 2022-004) Condition: Good internal controls over the receipt of federal funds require the reconciliation of authorized and recorded disbursements of cash drawn from the federal cash management system. This process ensures that federal funds are properly earned by the University and the University has not made a disbursement for which it has not been funded. During our audit, we noted that the University made efforts to reconcile its program activity under the COVID-19 Higher Education Emergency Relief Funds (American Rescue Plan - HEERF-III), Higher Educational Institutional Aid (Title III), and Strengthening Minority-Serving Institutions. However, we did not see evidence that the reconciliation of HEERF funding and Title III program activity is performed regularly as part of the University’s monthly and annual close-out. As a result, we noted the following: • The proper reconciliation of funds disbursed as allowed by the HEERF III program requires reconciliation of the funds drawn and disbursed for each assistant listing portion (1) a reconciliation of funds disbursed to students directly (student aid portion) and funds disbursed for other allowable expenditures to the general ledger, (2) a reconciliation to the disbursement for general operating purposes and loss revenue to the approved and documented methodology and the general ledger accounts and (3) all funds requested via the G-5 reports should be accurately reconciled to the general ledger and to the various detail reports supporting the disbursements. The reconciliations should be summarized and reported quarterly and annually as required by the CARES Act (See HEERF Reporting web page). • Financial statement adjustments were needed to properly recognize the cash balance for the Title III program, Strengthening Minority-Serving Institutions. The reconciliation process, as outlined in the internal control procedures is not performed in a timely manner. Context: Review of cash management procedures related to the HEERF and Title III-Strengthening Minority-Serving Institutions. Criteria: Standards for financial management systems [2 CFR §215.21] and CARES Act 18004 (ARP). Effect: The effect is that unresolved balances could represent excess cash due back to the U.S. Department of Education, or not receipting funds that are due to the University for students who have obtained their education. The failure to not meeting he three components of reporting for HEERF as required by the CARES Act and ARP. 63 WILBERFORCE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs June 30, 2023 Comment #2023-004 PROCEDURES GOVERNING THE RECONCILIATION AND MANAGEMENT OF FEDERAL PROGRAMS SHOULD BE IMPROVED STUDENT FINANCIAL AID CLUSTER PROGRAM HIGHER EDUCATIONAL INSTITUTIONAL AID STRENGTHENING MINORITY-SERVING INSTITUTIONS U.S. DEPARTMENT OF EDUCATION ALN# 84.031B and E, 84.382G, 84.425T (Questioned Costs - None) (Repeat 2022-004) (Continued) Cause: Weaknesses in procedures over reconciliation of grant activity. Recommendation: We recommend that management implement procedures to ensure that federal program activity is reconciled on a monthly basis for all open award years. This process should be coordinated between all affected departments (i.e., Grants and Contracts, Accounting Department, Student Financial Aid, etc.). The reconciled amounts should properly reflect amounts due to or from the U.S. Department of Education on the University’s general ledger accounting system. The reconciliations should be reviewed by a responsible official of the University. Monitoring of such reconciliation and the reporting requirements should be evidenced by internal control procedures and proper documentation of authorization. Views of Responsible Officials and Planned Corrective Actions: We concur with the auditor’s finding. The University has engaged a third party to review the reconciliation procedures and to make recommendations on improvements to our current policy. The recommendations will also include any additional documentation that showing proof that the reconciliation has been completed as timely as required. The Vice President of Business & Finance and the Director of Student Financial Aid will review the reconciliations. Monitoring reports will be completed and shared with senior management and relevant department leaders. Implementation date: Immediately. Persons Responsible: Vice President of Business & Finance, Controller and Director of Student Financial Aid.