Frazer LLP Blog

Modified Audit Opinion? You’re Not Alone.

Nov 29, 2016 1:50:37 PM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Modified Audit Report, Audit Opinion

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This is the ninth in a series of 10 blog posts related to the Top 10 Audit Findings of the U.S. Department of Education.

A qualified auditor’s opinion cited in the audit report is one of the top 10 audit findings by the U.S. Department of Education. Serious deficiencies and areas of concern included:

  • - R2T4 violations
  • - Inadequate accounting systems and/or procedures
  • - Lack of internal controls

Receiving anything other than an unmodified (unqualified) opinion is a disturbing experience, but it does occur from time to time. It might help to know you’re not alone. Receiving a modified (qualified) audit opinion offers the opportunity to focus improvement efforts in identified areas of weakness in operations, financial reporting and compliance.

Even the U.S. Department of Education (ED) has had its challenges over the years.
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The Role of Entrance and Exit Counseling in Financial Literacy

Nov 22, 2016 12:23:39 PM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Exit Counseling, Financial Aid, Entrance Counseling

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This is the eighth in a series of 10 blog posts related to the Top 10 Audit Findings of the U.S. Department of Education.

One of the top 10 audit findings, according to the U.S. Department of Education, includes student entrance and exit deficiencies. Indicated deficiencies include:

  • - Entrance counseling not conducted/documented for first-time borrowers.
  • - Exit counseling not conducted/documented for withdrawn students or graduates.
  • - Exit counseling materials not mailed to students who failed to complete counseling.

Whether first-time borrowers, withdrawn students or graduating students, follow through on required entrance and exit counseling can be challenging. Exit counseling, however, becomes a little more challenging considering the circumstances and variables involved with the ways students exit. This doesn’t come as a surprise to most but it only takes one or two off situations to catch the eye of a program reviewer. Let’s consider a short list of the compliance requirements mentioned in the FSA Handbook.

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Beware of New Tax Scam

Sep 30, 2016 4:06:52 PM / by Jeff C. Jones, CPA posted in Tax, CP-2000 Letters, Tax Scam

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A new scam is being circulated to taxpayers:

The IRS has warned that a new scam uses fraudulent notices (CP-2000 letters) to try and extract money from taxpayers. These fraudulent notices look convincing. The balance due amounts are generally low enough that taxpayers may be inclined to pay the amount requested rather than contact their accountants.  

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How should I document business expense deductions?

Sep 19, 2016 3:58:09 PM / by Jane Warren, CPA posted in Tax, Business Expense Deductions

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If you have incomplete or missing records and get audited by the IRS, your business will likely lose out on valuable deductions. Here are two recent U.S. Tax Court cases that help illustrate the rules for documenting deductions: insufficient records and destroyed documents.

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Watch Out for Student Credit Balance Deficiencies

Sep 8, 2016 10:17:47 AM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Title IV Funds, Student Credit Balance Deficiencies

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This is the seventh in a series of 10 blog posts related to the Top 10 Audit Findings of the U.S. Department of Education.

One of the top 10 audit findings, according to the U.S. Department of Education, includes student credit balance deficiencies. Indicated causes include:

 - Credit balances not released to students within 14 days,
- No process in place to determine when a credit balance has been created,
- Non-compliant authorization to hold Title IV credit balances, and
- Credit balances not released by the end of loan period or award year.

Credit balances can occur in many ways and may be the result of payments from not only Title IV program funds, but also personal funds, private loans, and institutional grants. Also, as you are aware, credit balances may be related to and affected by changes in a student's enrollment status that might affect federal or other aid eligibility. Technically, a Title IV credit balance typically occurs whenever your school credits Title IV program funds to a student’s account and the total amount of those funds exceeds the student’s allowable charges.

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Why do we disclose related party transactions?

Aug 19, 2016 2:10:45 PM / by Bethany Smith, CPA posted in Related Party Transactions, Financial Statements

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A related party transaction is a business deal or arrangement between two parties who are joined by a special relationship prior to the deal. A commonly seen related party transaction is a shareholder owning real estate and having a lease agreement with the corporation he owns shares in for the office space.

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Pell Grant Calculations Can be Confusing

Aug 9, 2016 12:35:58 PM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Pell Grant

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This is the sixth in a series of 10 blog posts related to the Top 10 Audit Findings of the U.S. Department of Education.

Pell Grant over/under payments are caused mainly by application of an incorrect Pell Grant formula, overall incorrect calculations, and errors connected to changes in enrollment status.

Background
According to the Higher Education Act of 1965, Title IV, Part A, Subpart 1, the Federal Pell Grant program is designed to help ensure access to postsecondary education for low and moderate income undergraduate students by providing grants that help meet postsecondary education costs.

According to a White House report in January 2014, titled “Increasing College Opportunity for Low-Income Students,” overall gains in U.S. college attainment have declined while other countries have continued to increase their share of citizens that complete college.

The Federal government has taken some action over the years to help keep college affordable for students and families. One of the steps taken includes increasing the maximum Pell Grant award from year to year, which expanded Pell Grant access to millions of students since 2008.

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The Top 5 Verification Violations and What You Can Do About It

Jun 30, 2016 1:10:44 PM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Verification

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This is the fifth in a series of 10 blog posts related to the Top 10 Audit Findings of the U.S. Department of Education.

Approximately 30% of students who submit a FAFSA are selected by the U.S. Department of Education for a process called Verification.  In most cases, applicants are selected by the U.S. Department of Education. However, an institution may also select a student.

At some schools almost all students are selected for verification, but this doesn’t mean there’s an error. It means the students wanting or receiving federal aid were selected for verification of certain information. Students selected for verification are notified on what is known as a Student Aid Report (SAR), which is generated from the Department of Education after a FAFSA is submitted.  Typically, students are also notified by the institution and additional documentation and/or substantiation may be required in order to complete the financial aid application. 

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Victim of disaster, fire or theft? How to deduct losses.

Jun 27, 2016 12:00:00 PM / by Nancy Chung, CPA posted in Tax

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If you suffer damage to your home or personal property, you may be able to deduct these “casualty” losses on your federal income tax return. A casualty is a sudden, unexpected or unusual event, such as a natural disaster (hurricane, tornado, flood, earthquake, etc.), fire, accident, theft or vandalism. A casualty loss doesn’t include losses from normal wear and tear or progressive deterioration from age or termite damage.

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Does summer day camp qualify for tax credits?

Jun 20, 2016 12:00:00 PM / by Jane Warren, CPA posted in Tax Credits

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Summer day camp is rapidly approaching for many families. If yours is among them, did you know that sending your child to day camp might make you eligible for a tax credit?

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