Finding Text
Internal Control over Compliance
Finding No. 2023-003 – Documentation of Internal Controls
Material Weakness
Federal program: Student Financial Aid Cluster – Federal Direct Student Loans (ALN 84.268), U.S. Department of Education
Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: We noted that controls identified by management over material compliance requirements lacked sufficient documentation to conclude application of controls is in place.
Cause: The cause is due to ineffective internal control procedures with no physical indication of review or an audit trail that indicates that the identified control took place.
Effect: Ineffective internal control procedures resulted in compliance findings. See Finding No. 2023-002.
Reportable questioned costs: None
Context: Internal controls in place over material compliance requirements identified by management had no documentation in place to demonstrate application of controls.
Repeat finding: This is a repeat finding of 2022-001.
Recommendation: We recommend that the Institute ensures that all internal control procedures in place include documentation that demonstrates application of controls.
Views of responsible officials: Management agrees with the finding. See corrective action plan.