Lake Land College

Criteria Based on the requirements of Title 2 CFR Part 170, Subpart A, reporting of first tier subawards and total compensation of subrecipient executives is required for each action that equals or exceeds $30,000. In addition, reporting of total compensation of recipient executives is required. However, none of the requirements regarding total compensation of executives apply unless in the entity's preceding fiscal year, it received a) 80 percent or more of its annual gross revenue in Federal procurement contracts and Federal financial assistance awards subject to the Transparency Act; and b) $25,000,000 or more in annual gross revenue from Federal procurement contractors and Federal financial assistance awards subject to the Transparency Act. Therefore, the College is exempt from the total compensation of executives reporting. However, the College is required to report on subcontracts for each action that equals or exceeds $30,000. Condition The College did not submit the required FFATA special reports in Fiscal Year 2024. Cause of Condition Management was unaware of this requirement and did not have a procedure in place to submit the required FFATA special reports. Effect of Condition Future funding could be limited or suspended due to noncompliance with the FFATA special reporting requirements of Title 2 CFR Part 170, Subpart A. Questioned Costs No questioned costs over $25,000. Context FFATA special reports were required to be submitted during Fiscal Year 2024. Management did not submit the required FFATA special reports. Repeat Finding This finding does not repeat a previous finding. Auditor's Recommendation Management should implement a procedure to timely complete and file the FFATA reporting required by Title 2 CFR Part 170, Subpart A. View of Responsible Official Management was unaware of this requirement and has taken appropriate action to ensure that the issue has been resolved. Management has filed FFATA reports for all active Fiscal Year 2025 subrecipients.

Criteria Under Uniform Guidance, management of the College is responsible for establishing and maintaining effective internal control over compliance requirements that have a direct and material effect on the College's federal programs. Condition The internal controls established for the Higher Education Emergency Relief Fund (HEERF) were not effective in selecting the proper procurement method. Population of Items Tested Expenditures for which procurement was tested during our audit procedures under the HEERF Institutional fund totaled $1,372,042 and expenditures tested under the Strengthening Institutions Fund portion totaled $290,176. Cause of Condition The College's policies and procedures allow for exceptions to procurement methods which are not allowed under federal regulations. Effects of Condition The College did not procure goods and services under the proper federal methodology for certain purchases during the fiscal year. Questioned Costs No questioned costs over $25,000. Context Our audit procedures identified $488,078 of expenditures that the College did not obtain quotes or bids as required by federal procurement policies. Repeat Finding This finding does not repeat a previous finding. Auditor's Recommendations The College should amend the policies and procedures to only allow for specific exceptions using federal funds as allowed by federal procurement regulations. View of Responsible Official Based on the guidance from Robbins Schwartz, the purchase may be made only after receiving an adequate number of competitive quotes from qualified sources, unless it is a nonexempt purchase in an amount between $25,000 and $250,000. In such cases, biding requirements under board policy 10.22 and the Illinois Public Community College Act will apply. In the future, the College will continue working with our auditors and legal counsel to ensure all bidding requirements are met for state, local, and federal funds.

Finding No. 2022-001 ? Internal Controls over Student Financial Assistance Special Test and Provisions Federal Program Name: Federal Student Assistance Cluster; Federal Pell Grant Program, Federal Direct Student Loans, Federal Supplemental Educational Opportunity, Federal Work Study Program CFDA Number: 84.063, 84.268, 84.007, and 84.033 Federal Agency: U.S. Department of Education Criteria/Specific Requirement: A. The Student Financial Aid Handbook states that if a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform an R2T4 calculation to determine the amount of the Title IV assistance earned by the student. B. The Department of Education issues Pell Grant Payment Schedules prior to the start of each award year. The current year award is taken from the payment schedule based on the estimated family contribution (EFC) and Cost of Attendance (COA). The maximum Pell Grant award for 2021-2022 is $6,495. Condition: A. During compliance testing of ?Special Tests and Provisions ? Return of Funds? we noted that for eight (8) out of twenty five (25) students tested the College utilized the incorrect semester end date for the Spring 2022 semester. B. During the compliance testing of ?Special Tests and Provisions ? Eligibility? we noted that one (1) student out of forty (40) students tested the College utilized the 2020-2021 Pell payment schedule versus the 2021-2022 Pell payment schedule. Questioned Costs: A. None B. None Context: A. Exceptions were noted in eight (8) of the twenty five (25) students tested. B. Exceptions were noted in one (1) of the forty (40) students tested. Effect: A. The amount of funds sent back to the Department of Education could be incorrect. B. The amount of Pell grant awarded to the student was under by $150. Finding No. 2022-001 ? Internal Controls over Student Financial Assistance Special Test and Provisions Cause: A. The College?s internal controls over the Return of Funds calculation were not effective. B. The College?s software system did correctly pull forward the current year Pell payment schedule. Recommendation: A. We recommend that the College develop internal controls to ensure that the correct dates are utilized for the Return of Funds calculation. B. We recommend the College establish procedures to ensure the software is utilizing the correct award information and criteria. Management?s Response: A. The College agrees with the auditor?s recommendation and will develop internal controls to ensure that accurate semester dates are utilized in the return of funds calculation to determine the amount of the Title IV assistance earned by the student. B. The College agrees with the auditor?s recommendation and will establish procedures to ensure the College's software is utilizing the current Pell payment schedule.

Finding No. 2020-001 - Internal Controls over Federal Student Assistance Programs

Finding No. 2019-001 ? Verification of FAFSA InformationFederal Program Name: Federal Student Assistance Cluster; Federal Pell Grant Program, Federal Direct Student Loans, Federal Supplemental Educational Opportunity, Federal Work Study ProgramCFDA Number: 84.063, 84.268, 84.007, and 84.033Federal Agency: U.S. Department of EducationCriteria/Specific Requirement:U.S. Code of Federal Regulations Title 34 CFR 668.56 requires that for each applicant whose FAFSA information is selected for verification by the Secretary the College must obtain specified documentation to verify the information as applicable under Title 34 CRF 668.57(a), 34 CRF 668.57(b), 34 CRF 668.57(c) and 34 CRF 668.57(d).Condition:During the audit of the Federal Student Assistance Cluster the following was noted:A. One instance was noted where a student had indicated on their verification documentation that a 2016 income tax return had been filed, but there was no support for a 2016 income in the student?s file, however, the student had also indicated on the Institutional Student Information Record (ISIR) that the student was not required to file a 2016 tax return.B. One instance was noted where a student divorced subsequent to completing their ISIR, they then completed a special circumstances form to remove the spouse?s income. When the College modified the student ISIR based on the student?s income tax transcript, the College inadvertently excluded the student?s unemployment compensaton from the student?s adjusted gross income (AGI).Questioned Costs:A. NoneB. NoneContext:A. One instance noted of 43 tested.B. One instance noted of 43 tested.Effect:A. The College?s documentation for the student did not agree to the student?s ISIR.B. Exclusion of the student?s unemployment compensation could have resulted in an understatement of the student?s Estimated Family Contribution (EFC) and an overstated in the student?s eligibility for grants and/or loans.Cause:The College?s internal controls over the student verification process were not effective.Recommendation:The College should develop internal controls to ensure that the student verification process is completed accurately.Management?s Response:The college agrees with the auditor?s recommendation and will develop internal controls to ensure that the student verification process is completed accurately. These measures include staff re-training on the verification items and proper documentation, as well as a system in which a sample of student files are reviewed a second time by another staff member to identify any potential errors or omissions and ensure accuracy in documentation and verification.