Frazer LLP Blog

Beware of Untimely or Incorrect G5 Expenditures Reporting

Dec 5, 2016 1:44:55 PM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, G5 Expenditures, G5 Reporting

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

Untimely and/or incorrect reporting of G5 expenditures is the tenth item from a list of audit findings in order of number of deficiencies found.

Regulatory background

G5, formerly known as GAPS, is a delivery system used by Federal Student Aid (FSA) that supports program award and payment (drawdown) administration. It is a component of EDCAPS, U.S. Department of Education’s (ED’s) integrated financial processing system, managed and administered by the Department’s Office of the Chief Information Officer (OCIO), and communicates with the Common Origination and Disbursement (COD) system through the Financial Management System (FMS).

There are basically two ways of receiving FSA from the ED including the advance payment method and what is known as the heightened cash monitoring method. For various reasons, the Department of Education may place institutions on a Heightened Cash Monitoring (HCM) payment method to provide additional oversight of cash management.

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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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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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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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Return of Title IV Funds Made Late? You’re Not Alone.

Jun 3, 2016 10:04:22 AM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Title IV Funds, R2T4

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

According to the U.S. Department of Education, one of the top 10 audit findings is R2T4 (return of Title IV funds) made late. The Department finds that many institutions are having trouble making returns within the allowable timeframe.  Common reasons for late returns include an institution’s policies and procedures not followed; returns not made within the allowable 45-day time frame; inadequate system in place to identify/track official and unofficial withdrawals; and, no system in place to track number of days remaining to return funds.

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The Challenge of Calculating the Return of Title IV Funds

May 9, 2016 4:56:33 PM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Title IV Funds, R2T4

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

According to the U.S. Department of Education, one of the top 10 audit findings is R2T4 (return of Title IV funds) calculation errors.

From a technical standpoint, regulations require that Title IV financial aid allocated for a student who later withdraws should be returned.

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Are You Filing Your NSLDS Rosters Timely?

Mar 8, 2016 1:47:00 PM / by Steve Bastardi, CPA posted in Institutions of Higher Learning, Audit

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

According to the U.S. Department of Education, one of the top 10 audit findings is inaccurate or untimely reporting of NSLDS rosters. Less than satisfactory reporting can have a negative impact on students’ records and details related to their financial aid status and history.

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Institutions of Higher Learning: Have You Taken Care of Your Compliance Audit Findings?

Feb 16, 2016 7:09:00 PM / by Steve Bastardi, CPA posted in Compliance Audit Findings, Institutions of Higher Learning

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

It’s that time of year again, getting your financial statements and compliance reporting processes in shape for your year-end single audit. Before your external auditors start their audit processing and testing you need confidence there will be limited or, hopefully, no compliance audit findings, especially repeat findings.

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