VERMONT STUDENT ASSISTANCE CORPORATION

Finding Number:2021-001 Information on the Federal Program: Federal Agency: United States Department of Education (ED) Program Name: Federal Family Education Loan Program AL: 84.032 Federal Family Education Loans Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2021 Specific Requirement: Under the Federal Family Education Loan program, guaranty agencies must submit the ED Form 2000, Guaranty Agency Financial Report (OMB No. 1845-0026), monthly, monthly/quarterly and annually. Conditions Found: Upon review of the Annual Form 2000 reconciliation, it was identified that the ?Loans Transferred Out? was entered incorrectly on line AR-7 of the online Annual Form 2000 submission. The Annual Form 2000 was appropriately reviewed by management, this error consisted of a transposition of numbers, not a breakdown in controls, resulting in a $9,000,000 variance between the Annual Form 2000 and the guaranty records Context: The conditions noted above were a result of a transposition of numbers (VSAC typed in ?10? as opposed to ?01?). The Annual Form 2000 is informational and has no financial statement impact. Questioned Costs: None. Cause and Effect: The conditions identified related to incorrectly typed numbers. The effect of the noted conditions results in an inaccurate balance of ?Loan Transfers Out? reported to the Department of Education. Recommendation: We recommend that VSAC correct the transposition of numbers as part of their next Annual ED Form 2000 submission. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan.

Finding No: 2021-001 Corrective Action Plan: During the preparation of the Annual Form 2000 and before submission, there is a formal review process that is done by two VSAC staff members. Unfortunately, there was a transposition error that was done and missed by both reviewers. The error was found by the auditors during interim work in May 2021. We contacted the US Department of Education (ED) to find out how to correct the amount on the FFY2020 Annual Form 2000. According to ED, there is no way to correct a prior year?s Annual Form 2000. They instructed us to correct it when we submit our next Annual Form 2000 for FFY 2021. VSAC will correct the error with the submission of the FFY2021 Annual Form 2000 which will be submitted in November 2021.