Salem Community College

2025-006 Special Tests and Provisions – Enrollment Reporting Federal Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Name of Program or Cluster: Student Financial Aid Cluster Agency: U.S. Department of Education Criteria: The College is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the College becomes aware of the change in enrollment status. Condition: SCC did not submit an accurate and/or timely status change notification to the NSLDS website for forty-one out of fifty-one students sampled from a total population of students who graduated, withdrew, or had an increase/decrease in attendance level during the year. Cause: Management oversight. Effect: Noncompliance with OMB federal grant compliance requirements. Questioned Costs: None. Repeat Finding: Yes, see finding 2024-005 Recommendation: The College should properly follow its policies and procedures over enrollment reporting to ensure that all status changes are submitted to the NSLDS website accurately and within the required timeframe. Views of Responsible Officials: See corrective action plan attached.

2024-005 Special Tests and Provisions – Enrollment Reporting Federal Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Name of Program or Cluster: Student Financial Aid Cluster Agency: U.S. Department of Education Criteria: The College is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the College becomes aware of the change in enrollment status. Condition: SCC did not submit an accurate and/or timely status change notification to the NSLDS website for twenty-three out of forty students sampled from a total population of students who graduated, withdrew, or had an increase/decrease in attendance level during the year. Cause: Management oversight. Effect: Noncompliance with OMB federal grant compliance requirements. Questioned Costs: None. Repeat Finding: No. Recommendation: The College should properly follow its policies and procedures over enrollment reporting to ensure that all status changes are submitted to the NSLDS website accurately and within the required timeframe. Views of Responsible Officials: See corrective action plan attached.

2024-006 Special Tests and Provisions – Return of Title IV Funds Federal Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Name of Program or Cluster: Student Financial Aid Cluster Agency: U.S. Department of Education Criteria: The College is required to accurately calculate return of Title IV funds for withdrawn students who began attendance, allocate the return of Title IV funds as required, notify borrowers of returned loans and/or follow the requirements for post-withdrawal disbursements as applicable. Condition: SCC did not calculate a return of Title IV funds and/or follow the requirements for post-withdrawal disbursements for one out of the nine students sampled from a total population of withdrawn students who began attendance.  Cause: Management oversight. Effect: Noncompliance with OMB federal grant compliance requirements. Questioned Costs: None. Repeat Finding: No. Recommendation: The College should properly follow its policies and procedures over return of Title IV funds to ensure that all R2T4 calculations are completed accurately and all requirements for post-withdrawal disbursements are followed where applicable. Views of Responsible Officials: See corrective action plan attached.

2023-008 Cash Management Federal Assistance Listing Number: 84.425F Name of Program or Cluster: COVID-19 - Higher Education Emergency Relief Fund (HEERF) Institutional Aid Agency: U.S. Department of Education Criteria: COVID-19 - Higher Education Emergency Relief Fund (HEERF) Institutional Aid (“COVID-19 HEERF”) funds should be disbursed within three calendar days of the drawdown from the U.S. Department of Education’s G5 grants management system portal. Condition: The College did not disburse funds within three calendar days of the G5 drawdown. Cause: COVID-19 HEERF Institutional expenses were not reconciled to the G5. Effect: Noncompliance with OMB federal grant compliance requirements. Questioned Costs: None. Repeat Finding: No. Recommendation: The College should develop a process for reconciling all G5 drawdowns to grant expenditures and disbursed in accordance to the compliance requirements. Views of Responsible Officials: See corrective action plan attached.

Type: Internal Control Over Compliance Criteria: The School must ensure that its accounting records clearly reflect that it segregates federal funds from all other funds and can determine the amount of funds related to each federal program. Condition: Federal funds are comingled within the School?s financial aid disbursement account. No reconciliation is done to identify the balance of each type of federal aid that is included in the account. Cause: Federal funds are deposited into one account. Effect: The remaining balance of each type of federal funds included in the account cannot be determined. Recommendation: The School should develop a process for identifying the balance of funds for each financial aid program that is included in the School?s financial aid disbursement account as readily as if those funds were in a separate account. Management?s Response: The school is in the process of establishing procedures to identify the type of federal funds remaining in the financial aid disbursement account.

Type: Internal Control Over Compliance Criteria: Institutions must report all loan disbursements and submit required records to the U.S. Department of Education?s Common Origination and Disbursement (COD) within 15 days of the disbursement. Condition: SCC did not report the disbursement for one student to COD within the 15 day time frame. Cause: This was an administrative oversight. Effect: COD was not notified timely. Recommendation: The School should review their procedures to ensure that COD is notified of each disbursement within the 15 day time frame. Management?s Response: The school will review their COD reporting procedures.

Type: Internal Control Over Compliance Criteria: Credit balances are required to be remitted to student no later than 14 days after the credit balance occurred. Condition: Credit balances for two students were not paid timely. Cause: The late payments were due to an oversight within the School. Effect: The students did not receive their credit balances timely. Recommendation: The School should review their procedures to ensure that student credit balances are returned within the 14-day time frame. Management?s Response: The School will review their procedures over the timely disbursement of student credit balances.

Type: Internal Control Over Compliance Criteria: Pell awards are calculated by taking into account a student?s status, expected family contribution and cost of attendance. These factors are used in conjunction with the Pell Grant Scheduled Award Chart for the 2021-2022 Award Year. Condition: The incorrect Pell Award was made for two students. Cause: The under award was due to an update error within SCC?s financial aid software Effect: The students were under awarded a total of $61. Recommendation: The School should implement procedures to ensure that the proper Pell funds are awarded. Management?s Response: The School will review their procedures relating to the Pell award calculation process.

Type: Internal Control Over Compliance Criteria: Awarded Direct Loans should be credited to student accounts timely. Condition: Two students did not receive their Direct Loan disbursements. Cause: The Direct Loans were awarded but the awards were not credited to the student?s accounts. Effect: The students did not receive Direct Loans totaling $7,917. Recommendation: The School should implement procedures to ensure that all Direct Loans are properly credited to student accounts. Management?s Response: The School will review their procedures relating to the disbursement of Direct Loans.

Type: Internal Control Over Compliance Criteria: The school must ensure that its accounting records clearly reflect that it segregates federal funds from all other funds. Condition: Federal Funds are comingled within the school's financial aid disbursement account. No reconciliation is done to identify the balance of each type of federal aid that is included in the account. Cause: Federal funds are deposited into one account. Effect: The remaining balance of each type of federal funds included in the account cannot be determined. Recommendation: The school should develop a process for identifying the balance of funds for each financial aid program that is included in the school?s financial aid disbursement account as readily as if those funds were in a separate account. Management's Response: The school is in the process of establishing procedures to identify the type of federal funds remaining in the financial aid disbursement account.

Type: Internal Control Over Compliance Criteria: If a school attempts to disburse a credit balance by check and the check is not cashed, the school must return the funds no later than 240 days after the date the school issued the check. Condition:SCC did not return to the federal government $2,259 for four credit balances issued via check disbursements. Cause: This was an administrative oversight. As a result of the impact of COVID-19, SCC had staffing issues that impacted both their accounting office and the financial aid office. Effect: The funds were not returned to the federal government timely. Recommendation: The school should review their procedures to ensure that all checks for student credit balances not cashed within 240 days are voided and the funds are return to the federal government. Management's Response: The school will review their procedures, however, management believes this was an isolated instance caused by the impact of COVID-19 on the school?s staff

Type: Internal Control Over Compliance Criteria: Credit balances are required to be remitted to student no later than 14 days after the credit balance occurred. Condition:A credit balance for one student was not paid timely. Cause: The late payment was due to an oversight within the school. Effect: The student did not receive their credit balance timely. Recommendation:The school should review their procedures to ensure that student credit balances are returned within the 14-day time frame. Management's Response: The school will review their procedures, however, management believes this was an isolated instance caused by the impact of COVID-19 on the school?s staff.

Type: Internal Control Over Compliance Criteria: Pell awards are calculated by taking into account a student?s status, expected family contribution and cost of attendance. These factors are used in conjunction with the Pell Grant Scheduled Award Chart for the 2020-2021 Award Year. Condition: The incorrect Pell Award was made for four students. Cause: The under award was due to an update error within SCC?s financial aid software. Effect: The students were under awarded a total of $57. Recommendation: The school should implement procedures to ensure that the proper Pell funds are awarded.. Management's Response: The school will review their procedures relating to the Pell award calculation process.

"Type: Internal Control Over Compliance Criteria: The school must ensure that its accounting records clearly reflect that it segregates federal funds from all other funds. Condition: Federal funds are comingled with non-federal funds within the school?s operating account. No reconciliation is done to identify the federal funds that are included in the operating account and interest related to the federal funds cannot be identified. Cause: Federal funds are deposited into a separate account and immediately transferred to the school?s operating account. All disbursements are made from the operating account. Effect: Federal funds cannot be identified from non-federal funds. Recommendation: The school should develop a process for identifying the balance of funds for each financial aid program that is included in the school?s operating account as readily as if those funds were in a separate account.

Type: Internal Control Over Financial Reporting Criteria: Government Accounting Standards require that proprietary fund types maintain their general ledger on an accrual basis. Condition: Salem Community College?s (SCC) general ledger did not properly report and reconcile the amounts due from students accounts receivable and unearned student tuition. Cause: SCC?s system for recording tuition charges and student payments is not recorded and reconciled within the accounting system. Effect: Interim financial reports could be misleading. Recommendation: SCC should implement control procedures to ensure the students? accounts receivable and unearned tuition revenue are properly recorded and reconciled with the general ledger. Management?s Response: SCC will implement procedures to ensure that the students? accounts receivable and unearned tuition revenue are properly recorded and reconciled to the general ledger.

Type: Internal Control Over Financial Reporting Criteria: Government Accounting Standards require that proprietary fund types maintain their general ledger on an accrual basis. Condition: SCC?s general ledger could not produce a historical accounts payable listing. Cause: SCC?s system for managing accounts payable could not be reconciled. Effect: Interim financial reports could be misleading. Recommendation: SCC should implement control procedures to assure the accounts payable are properly recorded and reconciled with the general ledger. Management?s Response: SCC will implement procedures to ensure that a historical accounts payable listing can be produced when needed.

Type: Internal Control Over Compliance Criteria: If a school attempts to disburse a credit balance by check and the check is not cashed, the school must return the funds no later than 240 days after the date the school issued the check. Condition: SCC did not return to the federal government $11,225 for multiple credit balances issued via check disbursements for the period 2009 ? 2017. Cause: The school was not aware of the requirement to return uncashed checks to the federal government within 240 days. Effect: The funds were not returned to the federal government timely. Recommendation: The school should develop and implement procedures to ensure that all checks for student credit balances not cashed within 240 days are voided and the funds are returned to the federal government. Management?s Response: Beginning in Fall of 2019, SCC began implementing procedures to ensure all uncashed student aid checks for credit balances are returned to the Department of Education within 240 days of issuance. In addition, during December of 2019 all outstanding Federal funds for the period 2009 - 2017 were returned to the Department of Education.

Type: Internal Control Over Compliance Criteria: To the extent possible, federal funds must be maintained in an interest-bearing account. Condition: The school did not maintain its federal funds in interest bearing accounts. Cause: The school was not aware of the requirement to maintain federal funds in interest bearing accounts. Effect: Interest was not earned on federal funds on deposit during the year. Recommendation: The school should ensure that all bank accounts in which federal funds are deposited are interest bearing accounts. Management?s Response: Beginning in Fall of 2019, SCC moved all federal funds to interest bearing accounts.

Type: Internal Control Over Compliance Criteria: The school must ensure that its accounting records clearly reflect that it segregates federal funds from all other funds. Condition: Federal funds are comingled with non-federal funds within the school?s operating account. No reconciliation is done to identify the federal funds that are included in the operating account and interest related to the federal funds cannot be identified. Cause: Federal funds are deposited into a separate account and immediately transferred to the school?s operating account. All disbursements are made from the operating account. Effect: Federal funds cannot be identified from non-federal funds. Recommendation: The school should develop a process for identifying the balance of funds for each financial aid program that is included in the school?s operating account as readily as if those funds were in a separate account. Management?s Response: Beginning in the Fall of 2019, SCC ceased comingling of federal funds with non-federal funds. The school is now able, at any given time, to identify the segregated amounts of the various federal and non-federal aid monies. Additionally, the school will endeavor to establish segregated accounts in their ledgers and bank.

Type: Internal Control Over Compliance Criteria: On a regular basis the school is required to perform a Pell Grant Reconciliation between the Department of Education and the school?s internal records. Condition: The school?s Pell Grant Reconciliations are not documented. Cause: The school?s policies and procedures for performing the Pell Grant Reconciliation have not been formalized. Effect: Pell Grant Reconciliations have not been documented. Recommendation: The school should formalize the Pell Grant Reconciliation process and document that the process has been completed. Management?s Response: SCC will formalize its Pell Grant Reconciliation process.

Type: Internal Control Over Compliance Criteria: On a monthly basis a school that participates in the Direct Loan Program is required to reconcile cash received from the Department of Education with disbursements submitted to the Common Origination and Disbursement system. Condition: The school?s Direct Loan Reconciliations are not documented. Cause: The school?s policies and procedures for performing the Direct Loan Reconciliation have not been formalized. Effect: Direct Loan Reconciliations have not been documented. Recommendation: The school should formalize the Direct Loan Reconciliation process and document that the process has been completed. Management?s Response: Beginning in September of 2019, SCC formalized its Direct Loan Reconciliation process.

Type: Internal Control Over Compliance Criteria: Pell awards are calculated by taking into account a student?s status, expected family contribution and cost of attendance. These factors used in conjunction with the Payment Schedule for Determining Full Time Scheduled Awards for the 2018-2019 Award Year. Condition: The incorrect Pell Award was made to one student. Cause: The school used the Payment Schedule for determining Full Time Scheduled Awards for the 2017-2018 Award Year. Effect: The student was under awarded $175 of Pell funds. Recommendation: The school should implement procedures to ensure that the proper Pell funds are awarded. Management?s Response: The school will implement the procedure of running a ?dynamic redetermination? on all students and develop a new checklist of all required procedures to be followed during the Pell award process.

Type: Internal Control Over Compliance Criteria: Higher education institutions are required to comply with the Gramm Leach Bliley Act (GLBA) regulations governing how student financial records are collected, stored and used. In order to comply with the Act a school must designate an individual to coordinate its security program and perform a risk assessment of the program?s key areas. Condition: The school has not completed the required risk assessment. Cause: Due to the school?s limited staff the assessment was not completed by the end of the school year. Effect: The school is not compliant with the Gramm Leach Bliley Act. Recommendation: The school should perform the required risk assessments. Management?s response: The school has begun an internal risk assessment and procedures review. Additionally, a data services cooperative/consortium has been engaged to assist in the process. The assessment is expected to be completed before the end of the current year.

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