EIN: 580973190
UEI: GSA_MIGRATION
Data as of August 22, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 5, 2022. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 5, 2022 (1356 days ago).
What is a management decision? →Our examination of reporting requirements associated with the 21st CCLC program revealed that the GaDOE failed to submit subaward data to the FSRS. Therefore, all first-tier subawards of $30,000 or more, and the associated subaward data, was not reflected on the USASpending.gov website as required. Cause: The GaDOE had established procedures in place to comply with the FFATA reporting requirements for federal awards. However, management over the 21st CCLC program was not aware of these requirements or procedures, and therefore, no information was reported through the FSRS. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review expenditure data associated with the State of Georgia?s 21st CCLC program. Recommendation: We recommend that the GaDOE: ? Follow established processes and procedures associated with the FFATA reporting requirements; ? Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and ? Maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: The Department of Education concurs with this audit finding. We will continuously monitor the compliance supplements for updates in order to meet all requirements. We are currently in the process of hiring new staff to complete FFATA reporting, which will better ensure the reports are submitted timely and accurately.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION STATE ENTITY: DEPARTMENT OF EDUCATION 2021-014 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Number and Title: 84.287 ? Twenty-First Century Community Learning Centers Federal Award Number: S287C20010 (Year 2021) Questioned Costs: None Identified Description: The Georgia Department of Education should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Twenty-First Century Community Learning Centers (21st CCLC) program was created to establish or expand community learning centers (Centers) that provide students with academic enrichment opportunities during non-school hours or periods when school is not in session to complement the students? regular academic program. These Centers provide services, such as tutoring, mentoring, homework help, community service opportunities, and music, arts, sports, and cultural activities. Funds associated with the 21st CCLC program are provided to the Georgia Department of Education (GaDOE) for allocation to eligible entities, including local educational agencies, community-based organizations, and other public or private entities, through competitive subgrants. Because GaDOE subgrants 21st CCLC program funds to various entities, the GaDOE must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of 21st CCLC program funds, is accessible via the USASpending.gov website. Criteria: As a recipient of federal awards, the GaDOE is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including GaDOE, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Data Universal Numbering System number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our examination of reporting requirements associated with the 21st CCLC program revealed that the GaDOE failed to submit subaward data to the FSRS. Therefore, all first-tier subawards of $30,000 or more, and the associated subaward data, was not reflected on the USASpending.gov website as required. Cause: The GaDOE had established procedures in place to comply with the FFATA reporting requirements for federal awards. However, management over the 21st CCLC program was not aware of these requirements or procedures, and therefore, no information was reported through the FSRS. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review expenditure data associated with the State of Georgia?s 21st CCLC program. Recommendation: We recommend that the GaDOE: ? Follow established processes and procedures associated with the FFATA reporting requirements; ? Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and ? Maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: The Department of Education concurs with this audit finding. We will continuously monitor the compliance supplements for updates in order to meet all requirements. We are currently in the process of hiring new staff to complete FFATA reporting, which will better ensure the reports are submitted timely and accurately.
2021-014 Improve Controls over Transparency Act Reporting Federal Agency: U.S. Department of Education State Entity: Department of Education We will continuously monitor the compliance supplements for updates in order to meet all requirements. We are currently in the process of hiring new staff to complete FFATA reporting, which will better ensure the reports are submitted timely and accurately.
A review of all cash drawdowns and disbursements related to the Federal Pell Grant and Federal Direct Student Loans programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. The following deficiency was noted: ? Two periods of unallowable, excessive cash balances were noted in the Federal Direct Student Loans program. These cash balances totaled as much as $621,311 and were maintained for a total of 35 days beyond three business days and/or the tolerance period of seven calendar days, if applicable. In addition, upon gaining an understanding of internal controls in place over the cash drawdown process, auditors reviewed documentation for one Federal Pell Grant program and four Federal Direct Student Loans program cash drawdowns to determine if the amounts requested were reasonable and the requests were reviewed and approved by supervisory personnel prior to submission to the U.S. Department of Education; however, evidence of supervisory review and approval was not reflected on the drawdown documentation provided by the University. Cause: In discussing these deficiencies with management, they stated that though supervisory reviews of cash drawdowns occurred, it was not the policy of University to maintain evidence of these reviews on file. In addition, appropriate monitoring of cash balances was not performed when adjustments to student aid amounts were processed, which led to the instances of unallowable, excessive cash balances within the Federal Direct Student Loans program. Effect: The University was not in compliance with federal regulations concerning the disbursement of Federal Direct Student Loan funds and excess cash. In addition, provisions included in Title 34 CFR Section 668.166(c) provide consequences for maintaining excess cash and state, ?Upon a finding that an institution maintained excess cash for any amount or time over that allowed in the tolerance provisions? the actions the Secretary may take include, but are not limited to ? (1) Requiring the institution to reimburse the Secretary for the costs the federal government incurred in providing that excess cash to the institution; and (2) Providing funds to the institution under the reimbursement payment method or heightened cash monitoring payment method.? Recommendation: The University should follow established procedures to ensure that Federal Direct Student Loan funds are disbursed within three business days of the receipt of such funds or follow appropriate cash tolerance procedures prescribed by the U.S. Department of Education. The University should only request Federal Direct Student Loan funds when the amounts are immediately needed to disburse funds to students or parents. The University should also ensure that potential excess cash balances are reviewed when adjustments are made to students? awards and returned as necessary within the prescribed timeframes. In addition, the University should establish procedures to ensure that Federal Pell Grant and Federal Direct Student Loan drawdown requests are properly reviewed and approved by supervisory personnel. The University should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: GEORGIA STATE UNIVERSITY 2021-015 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P063P200086 (Year: 2021), P268K210086 (Year: 2021) Questioned Costs: None Identified Description: The University does not have adequate controls in place to ensure that excessive cash balances are not maintained and appropriate reviews and approvals occur for requests of funds related to the Federal Pell Grant and Federal Direct Student Loans programs. Background Information: The University requests student financial assistance (SFA) funds from the U.S. Department of Education under the advance payment method. This is the most widely used method for requesting funds, and permits, but does not require, the University to draw down SFA funds prior to disbursing funds to eligible students and parents. The University?s request for funds must not exceed the amount it immediately needs for disbursements the University has made or will make to eligible students or parents. The disbursement of funds occurs on the date the Institution credits a student?s account or pays a student or parent directly with either SFA funds or institutional funds used in advance of drawing down federal funds. The University requested and received a net total of $104,815,425 in Federal Pell Grant funds and $200,698,649 in Federal Direct Student Loans program funds from the U.S. Department of Education during the fiscal year under review. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in Title 34 CFR Sections 668.163 and 668.166 provide requirements for maintaining and accounting for funds and excess cash, respectively. Specifically, provisions included in Title 34 CFR Section 668.166(a) state, ?The Secretary considers excess cash to be any amount of title IV, HEA program funds, other than Federal Perkins Loan Program funds, that an institution does not disburse to students or parents by the end of the third business day following the date the institution ? (1) Received those funds from the Secretary; or (2) Deposited or transferred to its depository account previously disbursed title IV, HEA program funds, such as those resulting from award adjustments, recoveries, or cancellations.? Furthermore, provisions included in Title 34 CFR Section 668.166(b) state, ?An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period.? Condition: A review of all cash drawdowns and disbursements related to the Federal Pell Grant and Federal Direct Student Loans programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. The following deficiency was noted: ? Two periods of unallowable, excessive cash balances were noted in the Federal Direct Student Loans program. These cash balances totaled as much as $621,311 and were maintained for a total of 35 days beyond three business days and/or the tolerance period of seven calendar days, if applicable. In addition, upon gaining an understanding of internal controls in place over the cash drawdown process, auditors reviewed documentation for one Federal Pell Grant program and four Federal Direct Student Loans program cash drawdowns to determine if the amounts requested were reasonable and the requests were reviewed and approved by supervisory personnel prior to submission to the U.S. Department of Education; however, evidence of supervisory review and approval was not reflected on the drawdown documentation provided by the University. Cause: In discussing these deficiencies with management, they stated that though supervisory reviews of cash drawdowns occurred, it was not the policy of University to maintain evidence of these reviews on file. In addition, appropriate monitoring of cash balances was not performed when adjustments to student aid amounts were processed, which led to the instances of unallowable, excessive cash balances within the Federal Direct Student Loans program. Effect: The University was not in compliance with federal regulations concerning the disbursement of Federal Direct Student Loan funds and excess cash. In addition, provisions included in Title 34 CFR Section 668.166(c) provide consequences for maintaining excess cash and state, ?Upon a finding that an institution maintained excess cash for any amount or time over that allowed in the tolerance provisions? the actions the Secretary may take include, but are not limited to ? (1) Requiring the institution to reimburse the Secretary for the costs the federal government incurred in providing that excess cash to the institution; and (2) Providing funds to the institution under the reimbursement payment method or heightened cash monitoring payment method.? Recommendation: The University should follow established procedures to ensure that Federal Direct Student Loan funds are disbursed within three business days of the receipt of such funds or follow appropriate cash tolerance procedures prescribed by the U.S. Department of Education. The University should only request Federal Direct Student Loan funds when the amounts are immediately needed to disburse funds to students or parents. The University should also ensure that potential excess cash balances are reviewed when adjustments are made to students? awards and returned as necessary within the prescribed timeframes. In addition, the University should establish procedures to ensure that Federal Pell Grant and Federal Direct Student Loan drawdown requests are properly reviewed and approved by supervisory personnel. The University should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2021-015 Improve Controls over Cash Management Federal Agency: U.S. Department of Education State Entity: Georgia State University The accumulation of Title IV cash occurred due to a high volume of funds being pulled back from student accounts and returned to the Title IV program for students that withdrew from classes. Office of Revenue, Receivable and Cashiering Services (RRCS) personnel responsible for Title IV drawdowns have been required to attend Federal Student Aid training over cash management. RRCS is now monitoring Title IV cash activity daily and will coordinate with the Office of Student Financial Aid on anticipated cash needs. In addition, evidence of supervisory review and approval has been added to Title IV drawdown documentation as recommended by the Georgia Department of Audits and Accounts.
A sample of 60 students from a population of 3,064 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? One student received $793 more in Federal Pell Grant Program funds than they were eligible to receive based upon their enrollment status. This resulted in an over disbursement of $793. Questioned Costs: Upon testing a sample of $673,058 in financial aid disbursements, known questioned costs of $793 were identified for the students who received student financial assistance in excess of their eligibility. Using the total population amount of $33,874,743, we project the likely questioned costs to be approximately $39,911. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that the Registrar?s Office did not receive notification from a faculty member that the student never began attendance in one course. The student?s financial aid had already been disbursed when the notification occurred and the Financial Aid Office was not made aware of the dropped class to adjust the student?s Federal Pell Grant Program funds. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: SAVANNAH STATE UNIVERSITY 2021-016 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A201039 (Year: 2021), P033A201039 (Year: 2021), P063P200091 (Year: 2021), P268K210091 (Year: 2021) Questioned Costs: $793.00 Repeat of Prior Year Finding: 2020-013 Description: The Institution?s Student Financial Aid Office improperly determined the Student Financial Assistance award amounts for eligible students and awarded amounts to ineligible students. Background Information: To receive student financial assistance (SFA), students must complete a Free Application for Federal Student Aid (FAFSA). Once the FAFSA is processed, an Institutional Student Information Record (ISIR) is provided to the Institution. Among other things, the ISIR contains the applicant?s Expected Family Contribution (EFC) and helps determine student eligibility, award amounts, and disbursements. The following types of student financial aid (SFA) was awarded and disbursed to students at the Institution: ? Federal Pell Grant (Pell) ? The Federal Pell Grant program provides grants to eligible students enrolled in eligible undergraduate programs and certain eligible post-baccalaureate teacher certificate programs and is intended to provide the foundation of financial aid. Maximum and minimum Pell Grant awards are established by statute, but the amount for which each student is eligible is based on Pell Grant Payment and Disbursement Schedules published every year by the U.S. Department of Education (ED). ? Federal Supplemental Educational Opportunity Grants (FSEOG) ? The FSEOG program provides grants to eligible undergraduate students. Priority for FSEOG awards is given to Pell Grant recipients who have the lowest EFC. ? Federal Work-Study (FWS) ? The FWS program provides part-time employment to eligible undergraduate and graduate students who need earnings to help meet the costs of postsecondary education. ? Federal Direct Student Loans ? The Direct Loan Program makes Direct Subsidized Loans and Direct Unsubsidized Loans to eligible students, and Direct PLUS Loans to eligible graduate or professional students or to eligible parents of eligible dependent undergraduate students, to pay for the cost of attending postsecondary educational institutions. Each student?s ISIR, along with other information, is used by the Institution to originate the student?s Direct Loan. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. All ED programs are authorized by Title IV of the Higher Education Act (HEA) of 1965, as amended (20 USC 1001 et seq.). In addition, provisions included in Title 34 CFR Section 668 provide general provisions for administering SFA programs and Title 34 CFR Sections 675, 676, 685, and 690 provide eligibility and other related program requirements that are specific to the FWS Program, FSEOG Program, Federal Direct Student Loans Program, and Federal Pell Grant Program, respectively. Condition: A sample of 60 students from a population of 3,064 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? One student received $793 more in Federal Pell Grant Program funds than they were eligible to receive based upon their enrollment status. This resulted in an over disbursement of $793. Questioned Costs: Upon testing a sample of $673,058 in financial aid disbursements, known questioned costs of $793 were identified for the students who received student financial assistance in excess of their eligibility. Using the total population amount of $33,874,743, we project the likely questioned costs to be approximately $39,911. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that the Registrar?s Office did not receive notification from a faculty member that the student never began attendance in one course. The student?s financial aid had already been disbursed when the notification occurred and the Financial Aid Office was not made aware of the dropped class to adjust the student?s Federal Pell Grant Program funds. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2021-016 Improve Controls over the Awarding Process Federal Agency: U.S. Department of Education State Entity: Savannah State University The institution has made an investment in a reporting tool that will enable the financial aid office staff to run reports that would catch any discrepancies between enrollment data and aid awarded or disbursed.
2020-013
A sample of 22 students from a population of 107 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for three students withdrew during the Spring 2021 semester could not be provided for review. Though it was determined that these students were eligible to receive their entire financial aid disbursement based upon their withdrawal date, the students were reflected on the Institution?s R2T4 listing and should have a calculation on-file. ? The refund calculation for one student who withdrew during the Fall 2020 semester was calculated incorrectly due to the use of improper withdrawal date. This student was requested to return $135 more than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester. ? Funds were not returned to the appropriate grantor programs within the required time frame for two of the withdrawn students tested. A sample of 39 students from a population of 190 students who received SFA for the Fall 2020 and Spring 2021 semesters and withdrew from the Institution but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that R2T4 calculations were actually performed for three of these students; therefore, the listing of R2T4 calculations provided for review was not accurate. Furthermore, the following deficiencies were noted upon review of these three R2T4 calculations: ? The proration between the school and student portion of the refund was incorrect for two of these students who withdrew during the Fall 2020 semester. ? Funds were not returned to the appropriate grantor programs within the required time frame for these three students. Cause: In discussing these deficiencies with management, they stated that financial aid staff did not clearly understand the audit requests related to R2T4 testing and did not seek clarification when auditors requested accurate listings from staff in multiple instances. In addition, staff turnover and absences due to COVID contributed to the lack of timeliness in performing R2T4 calculations and returning funds. Furthermore, human error in data entry resulted in the use of the incorrect withdrawal date in one student?s R2T4 calculation. Effect: This deficiency may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should implement procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: SAVANNAH STATE UNIVERSITY (continued) 2021-017 Improve Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A201039 (Year: 2021), P033A201039 (Year: 2021), P063P200091 (Year: 2021), P268K210091 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: 2020-017, 2016-034, 2015-016, 2014-033 Description: The Institution did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Background Information: Student financial assistance, or Title IV, funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. The R2T4 calculation is prepared using the following information associated with the period of enrollment: ? The student?s Title IV aid information, including amounts disbursed and amounts that could have been disbursed, ? The withdrawal date and scheduled start date, end date, and break days, and ? Institutional charges, including tuition, fees, room, board, books, supplies, materials, and equipment. In addition, an unofficial withdrawal is one in which the Institution has not received notice from the student that the student has ceased or will cease attending the school. Schools must have a procedure in place to determine when a student who began attendance and received or could have received an initial disbursement of Title IV funds unofficially withdrew. For these unofficial withdrawals, the Institution must also determine a withdrawal date, which may be the midpoint of the period of enrollment or the last date of an academically related activity in which the student participated. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The Institution is required to determine the amount of Title IV funds that the student earned as of the student?s withdrawal date when a recipient of Title IV funds withdraws from the Institution during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state ?(1) An institution must return the amount of title IV funds for which it is responsible? as soon as possible but no later than 45 days after the date of the institution?s determination that the student withdrew? (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the ? (i) Payment period or period of enrollment? (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.? Condition: A sample of 22 students from a population of 107 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for three students withdrew during the Spring 2021 semester could not be provided for review. Though it was determined that these students were eligible to receive their entire financial aid disbursement based upon their withdrawal date, the students were reflected on the Institution?s R2T4 listing and should have a calculation on-file. ? The refund calculation for one student who withdrew during the Fall 2020 semester was calculated incorrectly due to the use of improper withdrawal date. This student was requested to return $135 more than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester. ? Funds were not returned to the appropriate grantor programs within the required time frame for two of the withdrawn students tested. A sample of 39 students from a population of 190 students who received SFA for the Fall 2020 and Spring 2021 semesters and withdrew from the Institution but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that R2T4 calculations were actually performed for three of these students; therefore, the listing of R2T4 calculations provided for review was not accurate. Furthermore, the following deficiencies were noted upon review of these three R2T4 calculations: ? The proration between the school and student portion of the refund was incorrect for two of these students who withdrew during the Fall 2020 semester. ? Funds were not returned to the appropriate grantor programs within the required time frame for these three students. Cause: In discussing these deficiencies with management, they stated that financial aid staff did not clearly understand the audit requests related to R2T4 testing and did not seek clarification when auditors requested accurate listings from staff in multiple instances. In addition, staff turnover and absences due to COVID contributed to the lack of timeliness in performing R2T4 calculations and returning funds. Furthermore, human error in data entry resulted in the use of the incorrect withdrawal date in one student?s R2T4 calculation. Effect: This deficiency may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should implement procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2021-017 Improve Controls over the Return of Title IV Funds Process Federal Agency: U.S. Department of Education State Entity: Savannah State University The Financial Aid Office, the Bursar Office and the Registrar Office will review process flows to ensure that R2T4 calculations are being completed accurately and timely for both official and unofficial withdrawals. Staff will also receive additional training and a system of checks and balances will be implemented to make sure that data is entered correctly.
2020-017
A sample of 60 students who received Federal Pell Grant Program and/or Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For 18 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 12 students, the Enrollment Status and Program Enrollment Status reflected on the Campus-Level and Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For one student, the Certification Date reflected on the Campus-Level Record was not within 60 days of the student?s change in enrollment. ? For one student, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. ? For one student, NSLDS Enrollment Detail information was not provided for review. ? For one student, no information was transmitted to the NSLDS though the student received a financial aid disbursement and was dropped from classes due to nonattendance. Additionally, a sample of 22 students from a population of 107 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? enrollment statuses were reviewed to ensure that their withdrawn status was submitted to the NSLDS in a timely manner. For six students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the student?s change in enrollment. Cause: In discussing these deficiencies with management, they stated that staff turnover, employing new, less knowledgeable staff, and staff absences due to COVID led to disruptions to the NSLDS reporting scheduled and reporting errors. There was also a table configured incorrectly within the student information system and resulted in the reporting of incorrect enrollment statuses. Effect: The Institution was not in compliance with federal regulations concerning enrollment reporting requirements. Additionally, if enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Recommendation: The Institution should follow established policies and procedures to ensure that all changes in student enrollment statuses are reported in accordance with timeframes prescribed by the U.S. Department of Education. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: SAVANNAH STATE UNIVERSITY (continued) 2021-018 Strengthen Controls over Enrollment Reporting Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P063P200091 (Year: 2021), P268K210091 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2020-018 Description: Student enrollment information was not reported to required organizations in a timely and accurate manner. Background Information: Institutions are required to report enrollment information under the Federal Pell Grant and Federal Direct Student Loans programs via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates periodically throughout the award year. The accuracy and timeliness of enrollment information reported by the Institution impacts its ability to properly administer the various Student Financial Assistance programs. There are two categories of enrollment information reported to the NSLDS: ? Campus-Level, which includes data related to the student?s overall enrollment at an institution?s campus, and ? Program-Level, which includes data related to the student?s program(s) of attendance. The NSLDS Enrollment Reporting Guide provides institutions the requirements and guidance for reporting these specific campus-level and program-level enrollment details for students. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Regarding the enrollment reporting process, provisions included in Title 34 Section CFR 685.309(b) state that ?(1) Upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return the report to the Secretary ? (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe prescribed by the Secretary. (2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that ? (i) ? the student has ceased to be enrolled on at least a half-time basis for the period.? In addition, per the NSLDS Enrollment Reporting Guide issued by the U.S. Department of Education, students who have received Federal Pell Grant Program funds will be included on the NSLDS roster file received by each institution and are subject to the same enrollment reporting requirements as those students who have received a loan under the William D. Ford Federal Direct Loan Program. Condition: A sample of 60 students who received Federal Pell Grant Program and/or Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For 18 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 12 students, the Enrollment Status and Program Enrollment Status reflected on the Campus-Level and Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For one student, the Certification Date reflected on the Campus-Level Record was not within 60 days of the student?s change in enrollment. ? For one student, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. ? For one student, NSLDS Enrollment Detail information was not provided for review. ? For one student, no information was transmitted to the NSLDS though the student received a financial aid disbursement and was dropped from classes due to nonattendance. Additionally, a sample of 22 students from a population of 107 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? enrollment statuses were reviewed to ensure that their withdrawn status was submitted to the NSLDS in a timely manner. For six students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the student?s change in enrollment. Cause: In discussing these deficiencies with management, they stated that staff turnover, employing new, less knowledgeable staff, and staff absences due to COVID led to disruptions to the NSLDS reporting scheduled and reporting errors. There was also a table configured incorrectly within the student information system and resulted in the reporting of incorrect enrollment statuses. Effect: The Institution was not in compliance with federal regulations concerning enrollment reporting requirements. Additionally, if enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Recommendation: The Institution should follow established policies and procedures to ensure that all changes in student enrollment statuses are reported in accordance with timeframes prescribed by the U.S. Department of Education. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2021-018 Strengthen Controls over Enrollment Reporting Federal Agency: U.S. Department of Education State Entity: Savannah State University The Financial Aid Office and the Registrar?s Office will work on the policy and processes related to students who withdraw, change programs, or change enrollment status to ensure that these updates are processed timely and correctly. In addition, all set up tables in BANNER are being reviewed to ensure accuracy and reporting will occur at least once a month.
2020-018
A sample of 60 students from a population of 1,370 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? 24 students were not offered additional Federal Direct Student Loans that they were qualified to receive. ? Credit balances were not provided to eight students within 14 days of the date the balances were created. ? SFA disbursements were made to three students more than ten days prior to the first day of classes for the payment period. ? The disbursement of Federal Direct Student Loan funds was not delayed for 30 days after the first day of classes for one first-time borrower. Cause: In discussing these deficiencies with management, they stated that the student information system was improperly configured to limit student loan eligibility to the second-year annual loan limits in the current year. This was a result of the Institution participating in the Experiment Six program with the United States Department of Education in the prior award year. In addition, the student information system was configured to only recognize the first day of the standard semester schedule rather than alternate sessions. As a result, funds were disbursed after thirty days from the original start date of the semester rather than having individual disbursement schedules built for each session within a semester. Furthermore, the Institution was awaiting various adjustments to student accounts before issuing refunds resulting from credit balances. These adjustments were not made in a timely manner and caused an unallowable delay in processing refunds due to the students. Effect: These deficiencies could expose students to unnecessary financial strains as they may have requested additional Federal Direct Student Loan funds had the funds been offered. In addition, if students who received SFA funds prior to the allowable disbursement period chose not to attend classes when they actually began, the Institution would be required to return the funds to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful. Furthermore, the Institution was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: ATLANTA METROPOLITAN STATE COLLEGE 2021-019 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A200964 (Year: 2021), P033A200964 (Year: 2021), P063P203513 (Year: 2021), P268K213513 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2020-020 Description: The Institution?s Student Financial Aid Office improperly determined the Student Financial Assistance award amounts for eligible students. Background Information: To receive student financial assistance (SFA), students must complete a Free Application for Federal Student Aid (FAFSA). Once the FAFSA is processed, an Institutional Student Information Record (ISIR) is provided to the Institution. Among other things, the ISIR contains the applicant?s Expected Family Contribution (EFC) and helps determine student eligibility, award amounts, and disbursements. Additionally, we followed up on the Institution?s efforts to implement corrective action plans in response to the prior year finding in which we reported that the Institution improperly determined the SFA award amounts for eligible students. Although the Institution was unable to fully implement their corrective action plans associated with awarding students aid prior to fiscal year-end, we noted significant progress in implementing student information system coding updates, which led to the resolution of Satisfactory Academic Progress and transfer monitoring issues noted in the prior year. The following types of student financial aid (SFA) was awarded and disbursed to students at the Institution: ? Federal Pell Grant (Pell) ? The Federal Pell Grant program provides grants to eligible students enrolled in eligible undergraduate programs and certain eligible post-baccalaureate teacher certificate programs and is intended to provide the foundation of financial aid. Maximum and minimum Pell Grant awards are established by statute, but the amount for which each student is eligible is based on Pell Grant Payment and Disbursement Schedules published every year by the U.S. Department of Education (ED). ? Federal Supplemental Educational Opportunity Grants (FSEOG) ? The FSEOG program provides grants to eligible undergraduate students. Priority for FSEOG awards is given to Pell Grant recipients who have the lowest EFC. ? Federal Work-Study (FWS) ? The FWS program provides part-time employment to eligible undergraduate and graduate students who need earnings to help meet the costs of postsecondary education. ? Federal Direct Student Loans ? The Direct Loan Program makes Direct Subsidized Loans and Direct Unsubsidized Loans to eligible students, and Direct PLUS Loans to eligible graduate or professional students or to eligible parents of eligible dependent undergraduate students, to pay for the cost of attending postsecondary educational institutions. Each student?s ISIR, along with other information, is used by the Institution to originate the student?s Direct Loan. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. All ED programs are authorized by Title IV of the Higher Education Act (HEA) of 1965, as amended (20 USC 1001 et seq.). In addition, provisions included in Title 34 CFR Section 668 provide general provisions for administering SFA programs and Title 34 CFR Sections 675, 676, 685, and 690 provide eligibility and other related program requirements that are specific to the FWS Program, FSEOG Program, Federal Direct Student Loans Program, and Federal Pell Grant Program, respectively. Condition: A sample of 60 students from a population of 1,370 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? 24 students were not offered additional Federal Direct Student Loans that they were qualified to receive. ? Credit balances were not provided to eight students within 14 days of the date the balances were created. ? SFA disbursements were made to three students more than ten days prior to the first day of classes for the payment period. ? The disbursement of Federal Direct Student Loan funds was not delayed for 30 days after the first day of classes for one first-time borrower. Cause: In discussing these deficiencies with management, they stated that the student information system was improperly configured to limit student loan eligibility to the second-year annual loan limits in the current year. This was a result of the Institution participating in the Experiment Six program with the United States Department of Education in the prior award year. In addition, the student information system was configured to only recognize the first day of the standard semester schedule rather than alternate sessions. As a result, funds were disbursed after thirty days from the original start date of the semester rather than having individual disbursement schedules built for each session within a semester. Furthermore, the Institution was awaiting various adjustments to student accounts before issuing refunds resulting from credit balances. These adjustments were not made in a timely manner and caused an unallowable delay in processing refunds due to the students. Effect: These deficiencies could expose students to unnecessary financial strains as they may have requested additional Federal Direct Student Loan funds had the funds been offered. In addition, if students who received SFA funds prior to the allowable disbursement period chose not to attend classes when they actually began, the Institution would be required to return the funds to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful. Furthermore, the Institution was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2021-019 Improve Controls over the Awarding Process Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College 1. The Financial Aid adapted its awarding process to replace manual calculations to Banner electronic calculations 2. Banner Validation Tables and Rules were reviewed and updated internally to ensure fee/charge data were aligned with course registration/withdrawal and other registration data associated with R2T4 calculations 3. Enhanced faculty training to improve accuracy, documentation, and reporting of attendance verification (?No Shows?) 4. Developed a validation control, utilizing Crystal Report, to monitor ?over awards.? The results are passed on to the Business Office for updates to any refunds processed. 5. FA implemented a population selection process to extract all transfer students and verify against the RNATMNT form, prior to SFA, listing student registering after the Transfer Monitoring List, to ensure all transfer student data has been submitted. Finding Description #1 - Early Disbursement schedules not setup correctly in Banner; therefore, first-time loan borrowers were disbursed funds prior to an actual 30-day hold. Finding Description #2 - Banner setup was incorrect and thus the system did not recognize loan amount in excess of Grade Level 2. All students who were Grade Level 3 or 4 were never shown the true and correct loan eligibility amounts and instead were only shown and disbursed the lower Grade Level amounts as being their maximum eligibility. Finding Description #3 - Delayed credit balances provided to students after balances were created. Finding Description #4 - Early disbursement for students receiving PELL grant funds registered in different parts-of-term. Institutional Response to the Cause of the Finding Descriptions The Financial Aid Office relies on Banner, the institution?s student information system, for scheduling and implementation of disbursement of funds to students. The incorrect configuration of Banner validation and rule tables caused the 30-day disbursement hold error (Finding Description #1). The 30-day hold issue occurred because part-of-term start dates may occur less than 30 days apart (e.g. 15 Week Start Date: August 16, 2021; and the 12 Week Start Date: September 7, 2021). Disbursements, prior to the Spring 2021 finding, were distributed to students at the start of the semester, in the 15 Week part of term, regardless if the student was enrolled in a later part-of-term. Thus, this created the finding when students? funds were disbursed and the start dates of the part-of terms were less than 30 days apart. Finding Description #2, associated with loan amount limits, was a carry-over from the institution?s participation in a Department of Education ?Experiment 7? Pilot program. In this DOE program, the financial aid for certain students were limited based on certain variables, such as registered credit hours and classification. While the pilot program ended, the loan limits, inadvertently were kept in place. Finding Description #3, delayed credit balances to students were caused at a time during the semester when the institution?s Bursar was hospitalized and unable to process and send the credit balances to students in a timely manner. Moving forward, a back-up system has been put in place should the Bursar?s Office is unable to fulfill the responsibility of sending credit balances to students. The corrective actions taken to addressing Finding Description #3 and the other Finding Descriptions are provided in Table 2. The early disbursement of funds for PELL recipients (Finding #4) occurred when student was registered for multiple parts-of-term, but the disbursement was distributed in a single term. The source of this error was also incorrect setup of Banner validation/rule Tables (RORSAYR), which was configured with a disbursement scheduling based only on ?credit hours,? without any consideration for students who register for multiple parts-of-term. For example, if a student registered for nine total credit hours, one course in full 15-week term and two courses in the 12-week term, the student would receive all funds in the 15-week at the beginning of the 15-week term. Student disbursements were released by credit hour in a single disbursement, as opposed to being distributed across multiple parts-of-term. The institution does find it noteworthy of mentioning that while the award findings are classified under the same category, the nature (or types) of these findings in the Spring 2021 audit are different in nature from those in prior monitoring periods. Also, while the College takes all findings and their resolution very seriously, the Spring 2021 findings were all downgraded to non-material findings, when compared to a material finding in the prior year. Finding Descriptions Addressed /Corrective Action Taken #1 Early Disbursement - The validation and rule forms in Banner were corrected to accurately schedule disbursement to correspond to the 30-day hold for first-time loan borrowers. Two essential control were put in place to validate accurate disbursement: 1. A dynamic form will automatically notify the financial aid office of every first-time loan recipient who registers. This notification will prompt the Financial Aid staff to verify that the 30-day hold is in effect and accurate. 2. The Financial Aid R2T4 validation tables were certified for accuracy for the Fall 2021 semester. #2 Incorrect Loan limits - Grade Level loan limits have been removed and corrected in Banner for the 2021-2022 year, and moving forward. Loan Limits per Grade Level have been adjusted to the appropriate amounts at for grade levels, freshman to seniors. A comparison to the previous year demonstrates the correction. Banner screenshots comparing the past and current years verify the updates were made. #3 Delayed Credit Balances to Students - The contingency for sending out credit balances, and to carry out other Bursar responsibilities, in case the Bursar?s office is unable to do so. Effective September 1, 2021, the Interim VP Fiscal Affairs and Director Business Services will serve as backup to the Bursar in his/her absence. #4 Disbursement Across Multiple Parts-of-Term - The appropriate corrections have been made to Banner calculations to accurately provide disbursement scheduling to accurately disburse funds by part-of-term. Beginning Fall 2021, for students enrolled in multiple terms, disbursements will be distributed based on credits registered and by part of term. Thus, students registered in multiple parts-of-term will receive proportions of their funds, based on in each part-of-term he/she is enrolled. Similar to the dynamic form automatic notification for First-time loan recipients, a notification will be sent to the Financial Aid Office for all PELL recipients. This notification will prompt Financial aid staff to verify that disbursements occur in the proper part-of-term.
2020-020
A sample of 40 students from a population of 420 students who received student financial assistance (SFA) and were selected for verification by the U.S. Department of Education was randomly selected for testing using a non-statistical sampling method. Verification records were reviewed to ensure that the Institution obtained acceptable verification documentation, matched documentation obtained to the student aid application, submitted appropriate corrections when necessary, and reported the correct verification status to the Common Origination and Disbursement (COD) system. The following deficiencies were identified: ? One student?s 2020-2021 Verification Worksheet was not signed and dated to support compliance with verification requirements. The student was disbursed $3,966 in error. ? Two students who were independent non-filers did not appropriately certify all statements reflected on the 2020-2021 Unable to Obtain Verification of Nonfiling Letter from IRS Student Certification form. ? The tax return documentation provided for one student did not agree to their most recent ISIR. Questioned Costs: Upon testing a sample of $201,979 in financial aid disbursements to students who were selected for verification, known questioned costs of $3,966 were identified for the students for whom verification procedures were not completed appropriately and received SFA in excess of their eligibility. Using the total population amount of $2,091,830, we project the likely questioned costs to be approximately $41,075. The following assistance listing number was affected by the known and likely questioned costs: 84.063. Cause: In discussing these deficiencies with management, they stated that the errors were the result of limited staff in the Office of Financial Aid and human error. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The excess funds disbursed to students for whom verification procedures have not been completed appropriately must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with federal regulations concerning performing verification procedures and awarding of SFA funds to students. Recommendation: The Institution should follow established procedures to ensure that verification requirements are met and appropriate documentation is maintained on file. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of this finding, as well. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: ATLANTA METROPOLITAN STATE COLLEGE (continued) 2021-020 Strengthen Controls over the Verification Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A200964 (Year: 2021), P033A200964 (Year: 2021), P063P203513 (Year: 2021), P268K213513 (Year: 2021) Questioned Costs: $3,966.00 Description: The Institution?s Student Financial Assistance Office did not meet student verification requirements appropriately. Background Information: The U.S. Department of Education?s Central Processing System (CPS) is used to select students who will receive or have received subsidized student financial assistance for verification. Unless the student is otherwise excluded from the verification process, the Institution must require each student selected by the CPS to verify information as required for the verification tracking group to which the applicant is assigned. The annual Federal Student Aid (FSA) Handbook, Application and Verification Guide, provides institutions with information associated with the verification tracking groups and verification items required to be tested. The Institution may also require applicants to verify any information used to calculate an applicant?s expected family contribution (EFC) that the Institution has reason to believe is inaccurate. Approximately 31% of the students who received federal student aid in the current fiscal year were selected for verification. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in Title 34 CFR Sections 668.51 through 668.61 provide the compliance requirements for verification and updating student aid application information. Specifically, Title 34 CFR Section 668.56 states ?For each award year the Secretary publishes? the FAFSA [Free Application for Federal Student Aid] information that an institution and an applicant may be required to verify. For each applicant whose FAFSA information is selected for verification by the Secretary, the Secretary specifies the specific information? that the applicant must verify.? Additionally, Title 34 CFR Section 668.57 states, ?If an applicant is selected? an institution must obtain the specified documentation.? Furthermore, Title 34 CFR Section 668.60 states that ?(a) An institution must require an applicant selected for verification to submit to it, within the period of time it or the Secretary specifies, the documentation? that is requested by the institution. (b) For purposes of the subsidized student financial assistance programs, excluding the Federal Pell Grant Program ? (1) If an applicant fails to provide the requested documentation within a reasonable time period established by the institution ? (i) The institution may not (A) Disburse any additional Federal Perkins Loan or FSEOG [Federal Supplemental Educational Opportunity Grants] Program funds to the applicant; (B) Employ, continue to employ or allow an employer to employ the applicant under FWS [Federal Work-Study]; or (C) Originate the applicant?s Direct Subsidized Loan or disburse any additional Direct Subsidized Loan proceeds for the applicant; and (ii) The applicant must repay to the institution any Federal Perkins Loan or FSEOG received for that award year? (3) If an institution has received proceeds for a Direct Subsidized Loan on behalf of an applicant, the institution must return all or a portion of those funds? if the applicant does not complete verification within the time period specified. (c) For the purposes of the Federal Pell Grant Program? (2) If the applicant does not provide to the institution the requested documentation, and if necessary, a valid SAR [Student Aid Report] or the institution does not receive a valid ISIR [Institutional Student Information Record]? the applicant ? (i) Forfeits the Federal Pell Grant for the award year; and (ii) Must return any Federal Pell Grant payments previously received for that award year.? Condition: A sample of 40 students from a population of 420 students who received student financial assistance (SFA) and were selected for verification by the U.S. Department of Education was randomly selected for testing using a non-statistical sampling method. Verification records were reviewed to ensure that the Institution obtained acceptable verification documentation, matched documentation obtained to the student aid application, submitted appropriate corrections when necessary, and reported the correct verification status to the Common Origination and Disbursement (COD) system. The following deficiencies were identified: ? One student?s 2020-2021 Verification Worksheet was not signed and dated to support compliance with verification requirements. The student was disbursed $3,966 in error. ? Two students who were independent non-filers did not appropriately certify all statements reflected on the 2020-2021 Unable to Obtain Verification of Nonfiling Letter from IRS Student Certification form. ? The tax return documentation provided for one student did not agree to their most recent ISIR. Questioned Costs: Upon testing a sample of $201,979 in financial aid disbursements to students who were selected for verification, known questioned costs of $3,966 were identified for the students for whom verification procedures were not completed appropriately and received SFA in excess of their eligibility. Using the total population amount of $2,091,830, we project the likely questioned costs to be approximately $41,075. The following assistance listing number was affected by the known and likely questioned costs: 84.063. Cause: In discussing these deficiencies with management, they stated that the errors were the result of limited staff in the Office of Financial Aid and human error. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The excess funds disbursed to students for whom verification procedures have not been completed appropriately must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with federal regulations concerning performing verification procedures and awarding of SFA funds to students. Recommendation: The Institution should follow established procedures to ensure that verification requirements are met and appropriate documentation is maintained on file. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of this finding, as well. Views of Responsible Officials: We concur with this finding.
2021-020 Strengthen Controls over the Verification Process Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College Finding Description #1 - Verification Worksheet was found to be missing student/parent signatures. Finding Description #2 - Certification of Non-Tax Filing was not completed correctly or had missing information. Institutional Response to the Cause of the Finding Descriptions The primary cause for the finding on verifications is inadequate staffing to provide sufficient process time to not only conduct verifications, but also to perform appropriate quality control checks for accurate and timely verifications. Over the past two years, the University System of Georgia (USG) has implemented shared services across its 26 institutions. Starting Fall 2021, Atlanta Metropolitan State College, along with two other USG institutions (i.e., Fort Valley State University, and Albany State University) were selected for verification shared services. The goal of this USG shared service is to provide additional verification support to select public institutions, particularly those with the lowest staff FTEs, by coordinating System-wide technology and expertise to create synergistic outcomes that alleviate verification responsibilities at the local level and sustain high efficiency and quality outcomes. This shared service has already resulted in a more efficient and effective financial aid verification process at Atlanta Metropolitan State College. This new verification shared service is permanent and will reduce the staff workload and time required for verifications. This new USG program has directly addressed the College?s Spring 2021 Audit verification findings. The following corrective actions (Table 3) have been implemented Fall 2021 to address Audit Finding #2. Finding Descriptions Addressed/Corrective Action Taken #1 and #2 - (1) The institution will participate in a USG Shared Service for financial aid verification. This shared service is a comprehensive process that includes quality control of process outputs. AMSC is among the first USG institutions to enroll into this program, with two other USG institutions: Albany State University and Fort Valley State University. USG has assumed a major role organizing and implementing this shared service verification process for participating institutions. Utilizing the USG Shared Services for verification processing has provided the necessary support level needed such that this should not be a future finding for the institution. (2) AMSC has hired a new full-time Financial Aid staff member to assist with workload requirements and quality control of verifications. The new staff member will conduct additional validation to ensure accuracy of verifications. (3) The Department of Education has also negated V1 verification status codes for 2021-2022. Institutions will only be required to complete verification for V4 (i.e., Official HS Transcript or GED) and/or V5 Verification Flags (i.e., verification of identity/educational purpose). The reduction in V1 reduces workload requirements and allows more time spent on other aspects of the verification process.
A sample of 21 students from a population of 105 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for five students who withdrew during the Fall 2020 semester could not be provided for review. Two of these students were included on the listing in error as they did not withdraw and earned grades. In addition, one student did not attend during the period in which they were listed as having a R2T4 calculation. Furthermore, though it was determined that one of these students did withdraw but was eligible to receive their entire financial aid disbursement based upon their withdrawal date, this student was reflected on the Institution?s R2T4 listing and should have a calculation on-file. ? The refund calculations for one student who withdrew during the Fall 2020 semester and three students who withdrew during the Spring 2021 semester were calculated incorrectly due to the use of the improper scheduled term end date, scheduled break days and/or institutional charges. Two students were requested to return $452 less than the required amount to various SFA programs, and two students were requested to return $1,302 more than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester and three students who withdrew during the Spring 2021 semester. ? The amount returned within the student information system did not agree to the Institution?s calculation for one student. This caused the student to receive $601 in excess of their eligibility. ? Funds were not returned to the appropriate grantor programs within the required time frame for eleven of the withdrawn students tested. A sample of 60 students from a population of 270 students who received SFA for the Fall 2020 and Spring 2021 semesters and withdrew from the Institution but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. The following deficiencies were noted: ? R2T4 calculations were not performed appropriately for one student who unofficially withdrew during the Fall 2020 semester and 11 students who unofficially withdrew during the Spring 2021 semester. These students should have been required to return a total of $27,047 to various SFA programs. ? R2T4 calculations were actually performed for an additional 12 students; therefore, the listing of R2T4 calculations provided for review was not accurate. In addition, upon review of these calculations, auditors noted errors as follows: o The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester. o The refund calculations for six students who withdrew during the Fall 2020 semester was calculated incorrectly due to the use of the improper scheduled end date and institutional charges. Five students were requested to return $1,634 less than the required amount to various SFA programs and one student was requested to return $170 more than the required amount to various SFA programs. Questioned Costs: Upon testing a sample of $64,349 in financial aid disbursements to students for whom a R2T4 calculation was completed and $196,065 in financial aid disbursements to students who withdrew from the Institution but for whom no R2T4 calculation was performed, known questioned costs of $29,734 were identified for refunds not calculated appropriately or omitted. Using the total population amount of $1,085,800, we project the likely questioned costs to be approximately $122,692. The following assistance listing numbers were affected by the known and likely questioned costs: 84.007, 84.063, and 84.268. Cause: In discussing these deficiencies with management, they stated that the calculation to identify the 60% completion threshold was not correct and software issues identified in the student information system caused the errors noted above. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should implement procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: ATLANTA METROPOLITAN STATE COLLEGE (continued) 2021-021 Improve Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A200964 (Year: 2021), P033A200964 (Year: 2021), P063P203513 (Year: 2021), P268K213513 (Year: 2021) Questioned Costs: $29,734.00 Repeat of Prior Year Findings: 2020-021, 2017-027 Description: The Institution did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Background Information: Student financial assistance, or Title IV, funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. The R2T4 calculation is prepared using the following information associated with the period of enrollment: ? The student?s Title IV aid information, including amounts disbursed and amounts that could have been disbursed, ? The withdrawal date and scheduled start date, end date, and break days, and ? Institutional charges, including tuition, fees, room, board, books, supplies, materials, and equipment. In addition, an unofficial withdrawal is one in which the Institution has not received notice from the student that the student has ceased or will cease attending the school. Schools must have a procedure in place to determine when a student who began attendance and received or could have received an initial disbursement of Title IV funds unofficially withdrew. For these unofficial withdrawals, the Institution must also determine a withdrawal date, which may be the midpoint of the period of enrollment or the last date of an academically related activity in which the student participated. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The Institution is required to determine the amount of Title IV funds that the student earned as of the student?s withdrawal date when a recipient of Title IV funds withdraws from the Institution during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state ?(1) An institution must return the amount of title IV funds for which it is responsible? as soon as possible but no later than 45 days after the date of the institution?s determination that the student withdrew? (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the ? (i) Payment period or period of enrollment? (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.? Condition: A sample of 21 students from a population of 105 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for five students who withdrew during the Fall 2020 semester could not be provided for review. Two of these students were included on the listing in error as they did not withdraw and earned grades. In addition, one student did not attend during the period in which they were listed as having a R2T4 calculation. Furthermore, though it was determined that one of these students did withdraw but was eligible to receive their entire financial aid disbursement based upon their withdrawal date, this student was reflected on the Institution?s R2T4 listing and should have a calculation on-file. ? The refund calculations for one student who withdrew during the Fall 2020 semester and three students who withdrew during the Spring 2021 semester were calculated incorrectly due to the use of the improper scheduled term end date, scheduled break days and/or institutional charges. Two students were requested to return $452 less than the required amount to various SFA programs, and two students were requested to return $1,302 more than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester and three students who withdrew during the Spring 2021 semester. ? The amount returned within the student information system did not agree to the Institution?s calculation for one student. This caused the student to receive $601 in excess of their eligibility. ? Funds were not returned to the appropriate grantor programs within the required time frame for eleven of the withdrawn students tested. A sample of 60 students from a population of 270 students who received SFA for the Fall 2020 and Spring 2021 semesters and withdrew from the Institution but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. The following deficiencies were noted: ? R2T4 calculations were not performed appropriately for one student who unofficially withdrew during the Fall 2020 semester and 11 students who unofficially withdrew during the Spring 2021 semester. These students should have been required to return a total of $27,047 to various SFA programs. ? R2T4 calculations were actually performed for an additional 12 students; therefore, the listing of R2T4 calculations provided for review was not accurate. In addition, upon review of these calculations, auditors noted errors as follows: o The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester. o The refund calculations for six students who withdrew during the Fall 2020 semester was calculated incorrectly due to the use of the improper scheduled end date and institutional charges. Five students were requested to return $1,634 less than the required amount to various SFA programs and one student was requested to return $170 more than the required amount to various SFA programs. Questioned Costs: Upon testing a sample of $64,349 in financial aid disbursements to students for whom a R2T4 calculation was completed and $196,065 in financial aid disbursements to students who withdrew from the Institution but for whom no R2T4 calculation was performed, known questioned costs of $29,734 were identified for refunds not calculated appropriately or omitted. Using the total population amount of $1,085,800, we project the likely questioned costs to be approximately $122,692. The following assistance listing numbers were affected by the known and likely questioned costs: 84.007, 84.063, and 84.268. Cause: In discussing these deficiencies with management, they stated that the calculation to identify the 60% completion threshold was not correct and software issues identified in the student information system caused the errors noted above. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should implement procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2021-021 Improve Controls over the Return of Title IV Funds Process Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College Institutional Response to the Cause of the Finding Descriptions First and foremost, in early Spring 2021, the institution realized that seasoned and highly experienced leadership were necessary in the Director of Financial Aid and Registrar?s positions to fully resolve its compliance findings and issues associated with Standard 13.6. And that while several process changes were made in past monitoring report, the institution was addressing symptoms of the problems, but not truly treating the root source of the problems ? appropriate leadership and oversight of the Financial Aid Office and financial aid processes and policies. In addition, the institution realized after several attempts of fully addressing the R2T4 finding and related issues, a comprehensive review and training was necessary by an external, authorized organization for AMSC to fully address R2T4 findings and to align the processes with federal and state requirements. The institution achieved these two fundamental objectives at the beginning of Spring 2021, but was unable to fully really the outcomes before the Spring 2021 in June 2021. Beginning Summer 2021 and moving forward, the full fruition of the fundamental changes made are now fully realized. The institution is prepared to make its case further on the Special Committee?s October 2021 visit. Upon review of the Spring 2021 audit findings, the institution was able to meticulously determine the source of the R2T4 errors: (1) to strengthen process needs and (2) to not take the R2T4 errors into the Fall 2021 semester and beyond. The lack of standard procedures and policies, based on best practices, was an operational need that resulted in inaccurate R2T4 lists, and resulted in missing and inconsistent R2T4s. Prior to the Spring 2021 semester, the withdrawal lists were pulled by two separate offices, the Office of Management Information Systems? Database Manager and the Office of Institutional Research. When tracking the source of differences in R2T4 lists, it was determined that the two offices used different parameters to extract the R2T4 lists, which led to multiple variations in the lists created, including different lists, and inconsistent results for official and unofficial withdrawals, ultimately leading to R2T4 audit findings. The source of the majority of errors in R2T4 calculation findings in the Spring 2021 audit was determined to be human errors, with the exception of original charge errors generated in Banner due to incorrect setup of the appropriate validation and rule forms by the Registrar?s Office. For example, if a student reduced the credit hours from one enrollment status to another (e.g., full-time to half-time) but Banner did not accurately recalculate the student?s new enrollment status. It that case, the R2T4 calculation would be made on fulltime status rather than the actual half-time enrollment status of the student. Incorrect start/end dates, errors in determining the 60% cutoff in determining earned and unearned calculations, and incorrectly factoring holidays into the 60% attendance evaluations were errors tracked back to the source of the R2T4 identified audit report findings. In some cases, an uncertainty of last date of attendance (LDA) contributed to R2T4 calculations errors, which prompted the College to develop standard LDA policy. The references to proration and over-award errors in the audit report were tracked back to original charge errors created when Banner was not setup properly to accurately calculate credit hours for students. Collectively, the numerous errors led the institution to two clear conclusions (1) a more reliable and valid process was needed to ensure accurate R2T4 calculations across the board, and (2) a control is necessary to identify R2T4 errors at or near the point that they occur. Prior to Spring 2021, a single person, the Financial Aid Director, was responsible for ultimately vetting the withdrawal list for all R2T4 calculations and responsible for making R2T4 electronic fund transfers. A single person being responsible for carrying these multiple functions without neither a check-and-balance nor a monitoring process was a recipe that led to delays in the R2T4 processing and recurring R2T4 errors, such as those identified in the Spring 2021 audit and in prior monitoring reports. The next section identifies the fundamental and operational changes the institution made in the Spring 2021 that extended into early summer 2021 to complete. Finding Descriptions Addressed/Corrective Action Taken #1, #2 New Leadership in Financial Aid and Support Offices 1. A strategic decision was made to hire a well experienced, seasoned Interim Director of Financial Aid, a person highly capable of immediately addressing the multiple issues and audit findings associated with R4T4 processes and policies. A search for a permanent Director is currently advertised. The Interim Director will remain in place to provide support and training for the permanent Director. 2. A full-time College Registrar was hired, who brings decades of experience in R2T4 processes and support, significant Banner expertise, and a strong background in the Registrar?s Office processes and polices. 3. The new Full-time Financial Aid counselor, mentioned earlier in this report, will be assigned a percentage of workload toward R2T4 processing and controls. External Authorized and Independent Reviews and Training 1. In consultation with USG Staff, Atlanta Metropolitan State College added two additional layers of external consultation, review, validation, and training: College Aid Services (CAS) and the American Association of Collegiate Registrars and Admissions Officers (AACRAO). CAS is a national organization with expertise in financial aid processing and policy, was hired to review the College Financial Aid SAP and R2T4 processes. College Aid began its work at AMSC in Spring 2021, after the institution received the Third Monitoring Report notification from SACSCOC in January 2021. The timeframe that College Aid began its comprehensive review of AMSC?s R2T4 and SAP policies and procedures spanned through the Spring semester into the early summer term. 2. While some of the updates resulting from College Aid?s consultation were realized in the Spring Audit, insufficient time was available to incorporate the full scope of the updates prior to the Spring 2021 Audit. Full implementation of College Aid recommended corrective actions for AMSC R2T4 and SAP processes, however, have been implemented for the Summer 2021 and Fall 2021 terms. The College?s new full time Financial Aid staff member, mentioned earlier, will also provide additional support for R2T4 processes. College Aid R2T4 training and support will remain in place through Spring 2021 calendar year. The R2T4 training by College Aid, which started by contract the Spring 2021 semester, will extend into the Spring 2022 semester. 3. A comprehensive and comparable review and training was provided for the institution?s Registrar?s Office by the American Association of Collegiate Registrars and Admissions Officers AACRAO. This support and training began in the Spring 2021 semester and will continue through Summer 2021. Process Updates and Improvements As a result of comprehensive reviews by College Aid and AACRAO, along with the recommendations by new leadership in the Financial Aid and Registrar?s Offices, the following process updates and improvements were put in place to address the findings in the Spring 2021 audit, and moving forward: 1. A standard R2T4 procedure was created and implemented by the Financial Aid Office, including clear process steps, the responsibilities for all units supporting the R2T4 process, parameters for pulling R2T4 lists, and definitions associated with various steps in the R2T4 process. This standard process ensures consistency, timely reporting, and a coordinated effort for all contributors to the R2T4 process. 2. The Financial Aid R2T4 process has moved from a manual to an automated R2T4 process for making R2T4 calculations. This automated process, initiated Summer 2021, has eliminated the human errors driving most R2T4 miscalculations. The new automated Banner R2T4 process entails automated input of such information as LDAs, original charges, and date of determination. This direct input of R2T4 data are other examples of eliminating human error in R2T4 calculations. 3. An operations calendar was developed and implemented to ensure appropriate personnel R2T4 assignments and other financial aid tasks with timelines. 4.To ensure accuracy in withdrawal lists for R2T4 purposes, the primary assignment for pulling withdrawal data was assigned to a single source, the Office of Institutional Research, coordinating with the College?s Registrar?s Office. This action eliminates different multiple lists generated by different offices. 5.A comprehensive LDA policy was developed and implemented for the Spring 2021 and Fall 2021 semesters to define the terms and conditions of documenting processes for reporting and storing LDAs. This policy eliminates ambiguity and inconsistency of LDA reporting by faculty across the various Schools and increasing R2T4 accuracy. In addition, this policy identifies timeframes allowed for processing withdrawals (i.e., official and unofficial). 6.A ?60% calculator? consistent with Financial Aid practices and standards (and verified by College Aid) has been built and currently utilized by the institution for all R2T4 calculations. The ?60% calculator? correctly accounts for holidays in R2T4 60% calculations, a common error identified in the College?s Audit Report. A standard calculator to determine whether or not a student attended class beyond the 60% mark. See issued report for more details.
2020-021
A sample of 60 students who received Federal Pell Grant Program and Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For 38 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 26 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For four students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For one student, the Credential Level reflected on the Program-Level Record did not agree to the level of credential that the student would receive for the program the student was attending. ? For six students, the Published Program Length Measurement and/or Published Program Length reflected on the Program-Level Record was not appropriate based upon review of the Institution?s catalog. ? For two students, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. Additionally, a sample of 21 students from a population of 105 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? enrollment statuses were reviewed to ensure that their withdrawn status was submitted to the NSLDS. For nine students, the withdrawn enrollment status was not submitted to the NSLDS appropriately. Cause: In discussing these deficiencies with management, they stated the code for three quarters enrollment status was missing in the Banner Validation Table. In addition, human errors in which individuals changed status start dates in the enrollment reports unintentionally occurred. Effect: The Institution was not in compliance with federal regulations concerning enrollment reporting requirements. Additionally, if enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Recommendation: The Institution should follow established policies and procedures to ensure that all changes in student enrollment statuses are reported in accordance with timeframes prescribed by the U.S. Department of Education. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: ATLANTA METROPOLITAN STATE COLLEGE (continued) 2021-022 Strengthen Controls over Enrollment Reporting Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P063P203513 (Year: 2021), P268K213513 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2020-022 Description: Student enrollment information was not reported to required organizations in a timely and accurate manner. Background Information: Institutions are required to report enrollment information under the Federal Pell Grant and Federal Direct Student Loans programs via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates periodically throughout the award year. The accuracy and timeliness of enrollment information reported by the Institution impacts its ability to properly administer the various Student Financial Assistance programs. There are two categories of enrollment information reported to the NSLDS: ? Campus-Level, which includes data related to the student?s overall enrollment at an institution?s campus, and ? Program-Level, which includes data related to the student?s program(s) of attendance. The NSLDS Enrollment Reporting Guide provides institutions the requirements and guidance for reporting these specific campus-level and program-level enrollment details for students. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Regarding the enrollment reporting process, provisions included in Title 34 Section CFR 685.309(b) state that ?(1) Upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return the report to the Secretary ? (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe prescribed by the Secretary. (2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that ? (i) ? the student has ceased to be enrolled on at least a half-time basis for the period.? In addition, per the NSLDS Enrollment Reporting Guide issued by the U.S. Department of Education, students who have received Federal Pell Grant Program funds will be included on the NSLDS roster file received by each institution and are subject to the same enrollment reporting requirements as those students who have received a loan under the William D. Ford Federal Direct Loan Program. Condition: A sample of 60 students who received Federal Pell Grant Program and Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For 38 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 26 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For four students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For one student, the Credential Level reflected on the Program-Level Record did not agree to the level of credential that the student would receive for the program the student was attending. ? For six students, the Published Program Length Measurement and/or Published Program Length reflected on the Program-Level Record was not appropriate based upon review of the Institution?s catalog. ? For two students, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. Additionally, a sample of 21 students from a population of 105 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? enrollment statuses were reviewed to ensure that their withdrawn status was submitted to the NSLDS. For nine students, the withdrawn enrollment status was not submitted to the NSLDS appropriately. Cause: In discussing these deficiencies with management, they stated the code for three quarters enrollment status was missing in the Banner Validation Table. In addition, human errors in which individuals changed status start dates in the enrollment reports unintentionally occurred. Effect: The Institution was not in compliance with federal regulations concerning enrollment reporting requirements. Additionally, if enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Recommendation: The Institution should follow established policies and procedures to ensure that all changes in student enrollment statuses are reported in accordance with timeframes prescribed by the U.S. Department of Education. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2021-022 Strengthen Controls over Enrollment Reporting Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College Institutional Response to the Cause of the Finding Descriptions The institution?s review of the Spring 2021 findings on Enrollment Reporting, its conclusions, and subsequent course of action were very similar to those related to the R2T4 finding. Similarities existed in both cases as related to a single person executing essentially the full enrollment reporting process with limited controls to monitor and validate the outcomes. The lack of appropriate leadership and process controls over the NSC enrollment and NSLDS reporting were undermining progress made in updates made in prior monitoring reports. The institution made the decision to make fundamental changes in enrollment reporting, which details are provided in the next section. A line-by-line analysis of the errors identified in the Spring 2021 audit was completed. The National Student Loan Data System (NSLDS) Enrollment Finding resulted from a combination insufficient training requirement of staff updating NSLDS records/errors and insufficient controls to ensure consistent reporting across the NSLDS, National Student Clearinghouse (NSC) and Banner platforms. The College Registrar has assumed responsibilities for NSC and NSLDS submissions and validations, who bring extensive experience in NSC and NSLDS processing and submissions. The Regi, including R2T4 and SAP. The inaccurate enrollment status reporting for ? time was an incorrect Banner validation table setting. Incorrect enrollment and program data were tracked to human error, and a lack of understanding NSC and NSLDS codes. Prior to Spring 2021, there was no training requirement for staff processing NSC and NSLDS, and the lack train led to misinterpretation of terms and definitions, ultimately leading to errors in enrollment and program data. The lack of appropriate monitoring, accountability, and explicit submission expectations were determined to be the primary factors that led to delayed certification. Table 4 provides a list of the corrective actions taken to address the Spring 2021 audit Finding Descriptions in NSC and NSLDS Enrollment Reporting. Finding Descriptions Addressed Corrective Action Taken #1 New Leadership 1. To ensure the corrective actions in all areas of enrollment reporting are implemented accurately and in a timely manner, the new and permanent College Registrar, introduced earlier, has assumed the responsibility for NSC and NSLDS reporting. This individual brings a wealth of supervisory experience and process knowledge in enrollment reporting. Banner Updates 2. The Banner Validation Table was updated to now report the correct ? Time Enrollment Status. #2 , #3, #4 Process Updates and Improvements 3. A formal training is now required by the College Registrar for all individuals updating NSC and NSLDS errors and tables. 4. Starting the Fall 2021 semester [Exhibit xx], a control is now implemented to validate consistency between NSLDS, NSC, and Banner enrollment and program level data. 5. Standard NSC and NSLDS policies and Procedures, requirements to demonstrate and proficiency in definitions of SSDs and NSLDS terminology are now implemented to ensure consistent and reliable processing of NSC and NSLDS error reports in a timely manner.
2020-022
Our review of the student financial aid business process functions established within the system and related user permissions revealed the following deficiency: ? We found that 24 system users had the ability to control the complete cycle of the student financial aid operation. These users had system functions that gave them the capability to create student accounts, award student financial assistance, and disburse this aid to eligible students. The details related to this deficiency has been provided to Institution management in accordance with Official Code of Georgia Annotated (OCGA) ?50-6-9. Cause: We were informed by management that the lack of segregation of duties was the result of a staff shortage. In addition, a review of user account permissions and segregation of duties was not performed appropriately across the entire student and financial services function during the fiscal year. Effect: The deficiency in segregation of duties resulted in noncompliance with federal regulations specific to student financial assistance programs and the Uniform Guidance. In addition, this deficiency represents noncompliance with University System of Georgia directives. Furthermore, failure to maintain adequate internal controls related to segregation of duties could result in the loss or misappropriation of assets, which could go undetected. Recommendation: The institution should improve internal controls over the student financial aid business process functions, specifically regarding segregation of duties. Management should follow established policies and procedures to ensure the integrity and accuracy of the information used within the financial statements and as part of awarding financial assistance to students. Additionally, management should ensure that segregation of duties reviews are completed as recommended by the University System of Georgia. Furthermore, the Institution should develop and implement a monitoring process to ensure that controls are followed appropriately. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: DALTON STATE COLLEGE 2021-023 Strengthen Segregation of Duties Compliance Requirement: Activities Allowed or Unallowed Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A200990 (Year: 2021), P033A200990 (Year: 2021), P063P202464 (Year: 2021), P268K212464 (Year: 2021) Questioned Costs: None Identified Description: The Institution should strengthen segregation of duties over student financial aid within the student information system. Background Information: The Institution relies extensively on the student information system (the system) to create student accounts, award student financial assistance, and disburse this aid to eligible students. Controls over the system are essential for the reliability and integrity of student information and to protect student data from manipulation, corruption, or loss. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Specifically, provisions included in Title 34 CFR Section 668.16 state that ?to begin and to continue to participate in any Title IV, HEA [Higher Education Act] program, an institution shall demonstrate to the Secretary that the institution is capable of adequately administering that program. The Secretary considers an institution to have that administrative capability if the institution? (c)(1) Administers Title IV, HEA programs with adequate checks and balances in its system of internal controls; and (2) Divides the functions of authorizing payments and disbursing or delivering funds so that no office has responsibility for both functions with respect to any particular student aided under the programs.? Condition: Our review of the student financial aid business process functions established within the system and related user permissions revealed the following deficiency: ? We found that 24 system users had the ability to control the complete cycle of the student financial aid operation. These users had system functions that gave them the capability to create student accounts, award student financial assistance, and disburse this aid to eligible students. The details related to this deficiency has been provided to Institution management in accordance with Official Code of Georgia Annotated (OCGA) ?50-6-9. Cause: We were informed by management that the lack of segregation of duties was the result of a staff shortage. In addition, a review of user account permissions and segregation of duties was not performed appropriately across the entire student and financial services function during the fiscal year. Effect: The deficiency in segregation of duties resulted in noncompliance with federal regulations specific to student financial assistance programs and the Uniform Guidance. In addition, this deficiency represents noncompliance with University System of Georgia directives. Furthermore, failure to maintain adequate internal controls related to segregation of duties could result in the loss or misappropriation of assets, which could go undetected. Recommendation: The institution should improve internal controls over the student financial aid business process functions, specifically regarding segregation of duties. Management should follow established policies and procedures to ensure the integrity and accuracy of the information used within the financial statements and as part of awarding financial assistance to students. Additionally, management should ensure that segregation of duties reviews are completed as recommended by the University System of Georgia. Furthermore, the Institution should develop and implement a monitoring process to ensure that controls are followed appropriately. Views of Responsible Officials: We concur with this finding.
2021-023 Strengthen Segregation of Duties Federal Agency: U.S. Department of Education State Entity: Dalton State College We concur with this finding. Since the review was completed, the Office of Financial Aid and the Bursar?s Office have worked with the Office of Computer Information System (OCIS) to reduce the number of employees with multi-level access in Banner from 24 to 5. Unfortunately, due to limited staffing at DSC, it is nearly impossible to restrict access to all 24 individuals as some of those individuals have multiple job duties that require they have multi-level access in Banner. However, OCIS is aware that the institution needs mitigating controls in place for these staff members and therefore they are working with ITS to implement fain grain auditing in Banner and the institution will also begin performing the SOD matrix on a quarterly basis.
A sample of 15 students from a population of 103 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for three students who withdrew during the Fall 2020 semester and one student who withdrew during the Spring 2021 semester were calculated incorrectly due to the use of inappropriate rounding in the calculation of percentage of Title IV aid earned and the use of incorrect data associated with the amount of funds that could have been disbursed. One student was requested to return $564 less than the required amount to various SFA programs, and three students were requested to return $3,419 more than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Spring 2021 semester. A sample of 40 students from a population of 248 students who received SFA for the Fall 2020 and Spring 2021 semesters and withdrew from the Institution but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. The following deficiencies were noted: ? R2T4 calculations were not performed appropriately for four students who unofficially withdrew during the Fall 2020 semester and seven students who unofficially withdrew during the Spring 2021 semester. Ten of these students should have been required to return a total of $8,858 to various SFA programs, and one student was owed a post-withdrawal disbursement of $254 ? R2T4 calculations were actually performed for an additional four students; therefore, the listing of R2T4 calculations provided for review was not accurate. Questioned Costs: Upon testing a sample of $35,914 in financial aid disbursements to students for whom a R2T4 calculation was completed and $97,966 in financial aid disbursements to students who withdrew from the Institution but for whom no R2T4 calculation was performed, known questioned costs of $9,422 were identified for refunds not calculated appropriately or omitted. Using the total population amount of $879,959, we project the likely questioned costs to be approximately $65,094. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that human errors and inappropriate rounding within the student information system caused many of the R2T4 calculations performed to be inaccurate. In addition, for the R2T4 calculations that were not performed as required for unofficially withdrawn students, the student statuses were not updated from eligible to register to withdrawn within the student information system appropriately. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should follow established procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: DALTON STATE COLLEGE (continued) 2021-024 Improve Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A200990 (Year: 2021), P033A200990 (Year: 2021), P063P202464 (Year: 2021), P268K212464 (Year: 2021) Questioned Costs: $9,422.00 Description: The Institution did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Background Information: Student financial assistance, or Title IV, funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. The R2T4 calculation is prepared using the following information associated with the period of enrollment: ? The student?s Title IV aid information, including amounts disbursed and amounts that could have been disbursed, ? The withdrawal date and scheduled start date, end date, and break days, and ? Institutional charges, including tuition, fees, room, board, books, supplies, materials, and equipment. In addition, an unofficial withdrawal is one in which the Institution has not received notice from the student that the student has ceased or will cease attending the school. Schools must have a procedure in place to determine when a student who began attendance and received or could have received an initial disbursement of Title IV funds officially withdrew. For these unofficial withdrawals, the Institution must also determine a withdrawal date, which may be the midpoint of the period of enrollment or the last date of an academically related activity in which the student participated. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The Institution is required to determine the amount of Title IV funds that the student earned as of the student?s withdrawal date when a recipient of Title IV funds withdraws from the Institution during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state ?(1) An institution must return the amount of title IV funds for which it is responsible? as soon as possible but no later than 45 days after the date of the institution?s determination that the student withdrew? (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the ? (i) Payment period or period of enrollment? (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.? Condition: A sample of 15 students from a population of 103 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for three students who withdrew during the Fall 2020 semester and one student who withdrew during the Spring 2021 semester were calculated incorrectly due to the use of inappropriate rounding in the calculation of percentage of Title IV aid earned and the use of incorrect data associated with the amount of funds that could have been disbursed. One student was requested to return $564 less than the required amount to various SFA programs, and three students were requested to return $3,419 more than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Spring 2021 semester. A sample of 40 students from a population of 248 students who received SFA for the Fall 2020 and Spring 2021 semesters and withdrew from the Institution but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. The following deficiencies were noted: ? R2T4 calculations were not performed appropriately for four students who unofficially withdrew during the Fall 2020 semester and seven students who unofficially withdrew during the Spring 2021 semester. Ten of these students should have been required to return a total of $8,858 to various SFA programs, and one student was owed a post-withdrawal disbursement of $254 ? R2T4 calculations were actually performed for an additional four students; therefore, the listing of R2T4 calculations provided for review was not accurate. Questioned Costs: Upon testing a sample of $35,914 in financial aid disbursements to students for whom a R2T4 calculation was completed and $97,966 in financial aid disbursements to students who withdrew from the Institution but for whom no R2T4 calculation was performed, known questioned costs of $9,422 were identified for refunds not calculated appropriately or omitted. Using the total population amount of $879,959, we project the likely questioned costs to be approximately $65,094. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that human errors and inappropriate rounding within the student information system caused many of the R2T4 calculations performed to be inaccurate. In addition, for the R2T4 calculations that were not performed as required for unofficially withdrawn students, the student statuses were not updated from eligible to register to withdrawn within the student information system appropriately. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should follow established procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2021-024 Improve Controls over the Return of Title IV Funds Process Federal Agency: U.S. Department of Education State Entity: Dalton State College We concur with this finding. The Office of Student Financial Aid has worked in conjunction with the Registrar?s Office and the Office of Computing and Information Systems (OCIS) to streamline the collection of information on students who unofficially withdraw. Faculty who input grades of F or WF are required to enter a last date of attendance in Banner. The Registrar?s Office will be able to use that last date of attendance to identify students who stopped attending without completing an official withdrawal. Those students will then be considered to be Unofficial Withdrawals and will have calculations performed.
A sample of 40 students who received Federal Pell Grant Program and/or Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For nine students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 13 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For one student, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For one student, enrollment information related to the Campus-Level and Program-Level Record was not reported to NSLDS at all. Cause: In discussing these deficiencies with management, they stated that the code for the three-quarter-time enrollment status was missing in the student information system validation table and led to the deficiencies noted. Effect: The Institution was not in compliance with federal regulations concerning enrollment reporting requirements. Additionally, if enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Recommendation: The Institution should follow established policies and procedures to ensure that all changes in student enrollment statuses are reported in accordance with timeframes prescribed by the U.S. Department of Education. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: DALTON STATE COLLEGE (continued) 2021-025 Strengthen Controls over Enrollment Reporting Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P063P202464 (Year: 2021), P268K212464 (Year: 2021) Questioned Costs: None Identified Description: Student enrollment information was not reported to required organizations in a timely and accurate manner. Background Information: Institutions are required to report enrollment information under the Federal Pell Grant and Federal Direct Student Loans programs via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates periodically throughout the award year. The accuracy and timeliness of enrollment information reported by the Institution impacts its ability to properly administer the various Student Financial Assistance programs. There are two categories of enrollment information reported to the NSLDS: ? Campus-Level, which includes data related to the student?s overall enrollment at an institution?s campus, and ? Program-Level, which includes data related to the student?s program(s) of attendance. The NSLDS Enrollment Reporting Guide provides institutions the requirements and guidance for reporting these specific campus-level and program-level enrollment details for students. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Regarding the enrollment reporting process, provisions included in Title 34 Section CFR 685.309(b) state that ?(1) Upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return the report to the Secretary ? (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe prescribed by the Secretary. (2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that ? (i) ? the student has ceased to be enrolled on at least a half-time basis for the period.? In addition, per the NSLDS Enrollment Reporting Guide issued by the U.S. Department of Education, students who have received Federal Pell Grant Program funds will be included on the NSLDS roster file received by each institution and are subject to the same enrollment reporting requirements as those students who have received a loan under the William D. Ford Federal Direct Loan Program. Condition: A sample of 40 students who received Federal Pell Grant Program and/or Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For nine students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 13 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For one student, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For one student, enrollment information related to the Campus-Level and Program-Level Record was not reported to NSLDS at all. Cause: In discussing these deficiencies with management, they stated that the code for the three-quarter-time enrollment status was missing in the student information system validation table and led to the deficiencies noted. Effect: The Institution was not in compliance with federal regulations concerning enrollment reporting requirements. Additionally, if enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Recommendation: The Institution should follow established policies and procedures to ensure that all changes in student enrollment statuses are reported in accordance with timeframes prescribed by the U.S. Department of Education. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2021-025 Strengthen Controls over Enrollment Reporting Federal Agency: U.S. Department of Education State Entity: Dalton State College We concur with this finding. Students who were enrolled ? time were not being reported in previous semesters. Upon notification of this error, the Registrar?s Office added the necessary coding to the student management system to properly report this enrollment information to NSLDS.
A sample of 25 students from a population of 1,425 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? While no over disbursements occurred, one student was awarded more need-based financial aid than their financial aid need. ? One student was not in compliance with the Institution?s published Satisfactory Academic Progress (SAP) policies. The student did not meet the qualitative requirement of SAP, which resulted in over disbursements totaling $6,095. Questioned Costs: Upon testing a sample of $221,471 in financial aid disbursements, known questioned costs of $6,095 were identified for the student who received student financial assistance in excess of their eligibility. Using the total population amount of $9,104,968, we project the likely questioned costs to be approximately $250,573. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated a grade was reported late by a faculty member and was not available to be included in the SAP Calculation at the end of the students first semester at SGSC. If the grade had been present, the student would have been placed on financial aid warning instead of in good standing. At the end of the following semester, the student should have been placed on financial aid suspension but was only placed on financial aid warning due to the incorrect calculation during the prior semester. This resulted in the student receiving $6,095 is funds when they were ineligible for aid for the semester. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: SOUTH GEORGIA STATE COLLEGE 2021-026 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A201042 (Year: 2021), P033A201042 (Year: 2021), P063P201316 (Year: 2021), P268K211316 (Year: 2021) Questioned Costs: $6,095.00 Description: The Institution?s Student Financial Aid Office improperly determined the Student Financial Assistance award amounts for eligible students and awarded amounts to ineligible students. Background Information: To receive student financial assistance (SFA), students must complete a Free Application for Federal Student Aid (FAFSA). Once the FAFSA is processed, an Institutional Student Information Record (ISIR) is provided to the Institution. Among other things, the ISIR contains the applicant?s Expected Family Contribution (EFC) and helps determine student eligibility, award amounts, and disbursements. The following types of student financial aid (SFA) was awarded and disbursed to students at the Institution: ? Federal Pell Grant (Pell) ? The Federal Pell Grant program provides grants to eligible students enrolled in eligible undergraduate programs and certain eligible post-baccalaureate teacher certificate programs and is intended to provide the foundation of financial aid. Maximum and minimum Pell Grant awards are established by statute, but the amount for which each student is eligible is based on Pell Grant Payment and Disbursement Schedules published every year by the U.S. Department of Education (ED). ? Federal Supplemental Educational Opportunity Grants (FSEOG) ? The FSEOG program provides grants to eligible undergraduate students. Priority for FSEOG awards is given to Pell Grant recipients who have the lowest EFC. ? Federal Work-Study (FWS) ? The FWS program provides part-time employment to eligible undergraduate and graduate students who need earnings to help meet the costs of postsecondary education. ? Federal Direct Student Loans ? The Direct Loan Program makes Direct Subsidized Loans and Direct Unsubsidized Loans to eligible students, and Direct PLUS Loans to eligible graduate or professional students or to eligible parents of eligible dependent undergraduate students, to pay for the cost of attending postsecondary educational institutions. Each student?s ISIR, along with other information, is used by the Institution to originate the student?s Direct Loan. Once financial aid is awarded and disbursed to students, those students are required to maintain satisfactory academic progress (SAP) as defined by the Institution?s published standards. These published standards must include a review of a qualitative component, which is typically based upon grade point average (GPA), and a quantitative component, which is based upon successful completion of attempted coursework at a specified pace within a maximum timeframe. SAP must be evaluated at least once per academic year, and if at the time of each evaluation, the student has not maintained SAP, they are no longer eligible to receive SFA. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. All ED programs are authorized by Title IV of the Higher Education Act (HEA) of 1965, as amended (20 USC 1001 et seq.). In addition, provisions included in Title 34 CFR Section 668 provide general provisions for administering SFA programs and Title 34 CFR Sections 675, 676, 685, and 690 provide eligibility and other related program requirements that are specific to the FWS Program, FSEOG Program, Federal Direct Student Loans Program, and Federal Pell Grant Program, respectively. Condition: A sample of 25 students from a population of 1,425 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? While no over disbursements occurred, one student was awarded more need-based financial aid than their financial aid need. ? One student was not in compliance with the Institution?s published Satisfactory Academic Progress (SAP) policies. The student did not meet the qualitative requirement of SAP, which resulted in over disbursements totaling $6,095. Questioned Costs: Upon testing a sample of $221,471 in financial aid disbursements, known questioned costs of $6,095 were identified for the student who received student financial assistance in excess of their eligibility. Using the total population amount of $9,104,968, we project the likely questioned costs to be approximately $250,573. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated a grade was reported late by a faculty member and was not available to be included in the SAP Calculation at the end of the students first semester at SGSC. If the grade had been present, the student would have been placed on financial aid warning instead of in good standing. At the end of the following semester, the student should have been placed on financial aid suspension but was only placed on financial aid warning due to the incorrect calculation during the prior semester. This resulted in the student receiving $6,095 is funds when they were ineligible for aid for the semester. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2021-026 Improve Controls over the Awarding Process Federal Agency: U.S. Department of Education State Entity: South Georgia State College To ensure that the deficiencies do not occur again we have taken the following actions: ? While no over disbursements occurred, one student was awarded more need-based financial aid than their financial aid need. In the first situation, information came to light after a student had already been awarded for the academic year which impacted their financial need. However, the students existing loan which had already been disbursed was not cancelled and the funds returned. A new policy has been developed and implemented to address these situations. The new policy requires that when a student is found to be ineligible after an award is made, the Director of Financial Aid or their representative will eliminate the over award by reducing the students need based award and returning and funds previously disbursed. ? One student was not in compliance with the Institution?s published Satisfactory Academic Progress (SAP) policies. The student did not meet the qualitative requirement of SAP, which resulted in over disbursements totaling $6,095. In the second situation, a grade was reported late by a faculty member and was not available to be included in the SAP Calculation at the end of the students first semester at SGSC. If the grade had been present the student would have been placed on warning instead of in good standing. At the end of the following semester, the student should have been placed on financial aid suspension for SAP, but was only placed on warning due to the incorrect calculation the prior semester and went on to receive $6,095 is funds when they were ineligible for aid for the semester. A new procedure has been implemented where any grade changes receive by the Office of the Registrar are forwarded to the Associate Director of Financial Aid for them or their designee to recalculate SAP for the term the grade was posted to and any later semesters. Periodic reviews of grade changes will be conducted to ensure that the procedure has resolved the situation and prevents future awards to ineligible students.
A sample of 40 students from a population of 1,002 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculation for one student who withdrew during the Fall 2020 semester was calculated incorrectly due to the use of the improper withdrawal date. This student was requested to return $1,160 less than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester. ? The amount returned within the student information system did not agree to the Institution?s calculation for one student. ? The refund amounts for one student who withdrew during the Fall 2020 semester and one student who withdrew during the Spring 2021 semester were calculated appropriately but were never returned to the appropriate grantor programs. The Institution did not report or return $4,701 as required to various SFA programs. ? Funds were not returned to the appropriate grantor programs within the required time frame for four of the withdrawn students tested. ? In 20 instances, the student?s withdrawal was never reported to the National Student Loan Data System (NSLDS). Questioned Costs: Upon testing a sample of $92,853 in financial aid disbursements to students for whom a R2T4 calculation was completed, known questioned costs of $5,861 were identified for refunds not adequately supported or calculated incorrectly. Using the total population amount of $2,708,189, we project the likely questioned costs to be approximately $170,931. The following assistance listing numbers were affected by the known and likely questioned costs: 84.007, 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated the midpoint of the term was not used for the withdrawal date appropriately for one student. In addition, student refund amounts were not returned to the U.S. Department of Education properly due to a lack of training associated with the tracking log in the Common Origination and Disbursement system for Direct Loans. Furthermore, an error in the upload process used to capture unofficial withdrawals led to the failure to report this withdrawal activity to the NSLDS. Effect: This deficiency may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly or never reported must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should follow established procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION (continued) STATE ENTITY: GWINNETT TECHNICAL COLLEGE 2021-027 Strengthen Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A206421 (Year: 2021), P033A206421 (Year: 2021), P063P204114 (Year: 2021), P268K214114 (Year: 2021) Questioned Costs: $5,861.00 Description: The Institution did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Background Information: Student financial assistance, or Title IV, funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. The R2T4 calculation is prepared using the following information associated with the period of enrollment: ? The student?s Title IV aid information, including amounts disbursed and amounts that could have been disbursed, ? The withdrawal date and scheduled start date, end date, and break days, and ? Institutional charges, including tuition, fees, room, board, books, supplies, materials, and equipment. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The Institution is required to determine the amount of Title IV funds that the student earned as of the student?s withdrawal date when a recipient of Title IV funds withdraws from the Institution during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state ?(1) An institution must return the amount of title IV funds for which it is responsible? as soon as possible but no later than 45 days after the date of the institution?s determination that the student withdrew? (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the ? (i) Payment period or period of enrollment? (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.? Condition: A sample of 40 students from a population of 1,002 students who received student financial assistance (SFA) and withdrew from the Institution during the Fall 2020 and Spring 2021 semesters was randomly selected for testing using a non-statistical sampling method. The students? R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculation for one student who withdrew during the Fall 2020 semester was calculated incorrectly due to the use of the improper withdrawal date. This student was requested to return $1,160 less than the required amount to various SFA programs. ? The proration between the school and student portion of the refund was incorrect for one student who withdrew during the Fall 2020 semester. ? The amount returned within the student information system did not agree to the Institution?s calculation for one student. ? The refund amounts for one student who withdrew during the Fall 2020 semester and one student who withdrew during the Spring 2021 semester were calculated appropriately but were never returned to the appropriate grantor programs. The Institution did not report or return $4,701 as required to various SFA programs. ? Funds were not returned to the appropriate grantor programs within the required time frame for four of the withdrawn students tested. ? In 20 instances, the student?s withdrawal was never reported to the National Student Loan Data System (NSLDS). Questioned Costs: Upon testing a sample of $92,853 in financial aid disbursements to students for whom a R2T4 calculation was completed, known questioned costs of $5,861 were identified for refunds not adequately supported or calculated incorrectly. Using the total population amount of $2,708,189, we project the likely questioned costs to be approximately $170,931. The following assistance listing numbers were affected by the known and likely questioned costs: 84.007, 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated the midpoint of the term was not used for the withdrawal date appropriately for one student. In addition, student refund amounts were not returned to the U.S. Department of Education properly due to a lack of training associated with the tracking log in the Common Origination and Disbursement system for Direct Loans. Furthermore, an error in the upload process used to capture unofficial withdrawals led to the failure to report this withdrawal activity to the NSLDS. Effect: This deficiency may expose the Institution to unnecessary financial strains and shortages. The Institution?s portion of the refunds that were not calculated correctly or never reported must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should follow established procedures to ensure that R2T4 calculations are accurate and that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should contact the U.S. Department of Education regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2021-027 Strengthen Controls over the Return of Title IV Funds Process Federal Agency: U.S. Department of Education State Entity: Gwinnett Technical College The Financial Aid Office has worked with the Registrar?s Office, Academic Affairs leadership, and the Business Office to streamline the collection, review, and processing of students who are unofficial withdrawals. Streamlining the unofficial withdrawal process will allow for timely and accurate reporting, return of title IV, and reconciliation of funds between GTC and COD.
Our review of the MCO annual audited financial report submissions specific to Medicaid disclosed that two out of four audited financial reports were not obtained by the DCH until after the auditors had requested the reports for review. Furthermore, we noted the contracts between the DCH and the MCOs do not have a clause requiring the MCOs to submit their audited financial statements to the DCH. In addition, although the periodic independent audits of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO were conducted, there was no evidence that the results of these four required periodic audits had been posted on the State?s website as required by federal regulations. Cause: There was no clause in the contracts or procedure in place to ensure that each MCO submits audited financial reports in timely manner to the DCH in accordance with Medicaid regulations. Additionally, the DCH does not have procedures in place to ensure the results of the periodic audits are being posted to the State?s website. Effect: The deficiency in internal controls over monitoring the MCOs? audited financial statements increases the likelihood that inappropriate uses of Medicaid and CHIP funds may occur and not be detected by management in a timely manner. Furthermore, noncompliance with federal regulations may result in the grantor penalizing the DCH for noncompliance by suspending or terminating the award or withholding future awards. Recommendation: The DCH should revise the current contracts with MCOs to include a clause requiring MCOs to submit on an annual basis, to the DCH, audited financial reports specific to the Medicaid contract. In addition, the DCH should implement policies and procedures to ensure the obtention of the required MCOs audited financial reports and that the results of the periodic audits are posted to the State?s website. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES STATE ENTITY: DEPARTMENT OF COMMUNITY HEALTH 2021-028 Improve Controls over Managed Care Organization Financial Audits Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.767 ? Children?s Health Insurance Program 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 ? COVID -19 ? Medical Assistance Program (Medicaid: Title XIX) Federal Award Number: 2005GA5MAP (Year 2020), 2105GA5MAP (Year 2021), 2005GA5021 (Year: 2020), 2105GA5021 (Year: 2021) Questioned Costs: None Identified Description: The Department of Community Health does not have adequate controls in place to ensure the required managed care financial audits are being conducted and the results of the required periodic audits are posted on the State?s website. Background Information: The Department of Community Health (DCH) administers the State?s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of Georgia?s largest public assistance programs with federal and state funds totaling approximately $12 billion for fiscal year 2021. The DCH is also responsible for administering the Children?s Health Insurance Program (CHIP) that provides child medical coverage to low-income families who exceed Medicaid income limits. The State may use managed care to deliver Medicaid and CHIP benefits and services. The DCH partners with private managed care organizations (MCO) that provide health services to members of Medicaid. Partnering with multiple organizations provides members with a choice of various health plans and allows them to choose the option that best fits their needs. Criteria: As a recipient of federal awards, the DCH is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Pursuant to Title 42 CFR Section 438.3(m), the contract between the State and an MCO must require MCOs to submit audited financial reports specific to the Medicaid contract on an annual basis. The audit must be conducted in accordance with generally accepted accounting principles and generally accepted auditing standards. Additionally, pursuant to 42 CFR Section 438.602(e) and (g) and 42 CFR 457.1285, the DCH is required to conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO at least once every three years. The results of the periodic audits are required to be posted on the State?s website. Condition: Our review of the MCO annual audited financial report submissions specific to Medicaid disclosed that two out of four audited financial reports were not obtained by the DCH until after the auditors had requested the reports for review. Furthermore, we noted the contracts between the DCH and the MCOs do not have a clause requiring the MCOs to submit their audited financial statements to the DCH. In addition, although the periodic independent audits of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO were conducted, there was no evidence that the results of these four required periodic audits had been posted on the State?s website as required by federal regulations. Cause: There was no clause in the contracts or procedure in place to ensure that each MCO submits audited financial reports in timely manner to the DCH in accordance with Medicaid regulations. Additionally, the DCH does not have procedures in place to ensure the results of the periodic audits are being posted to the State?s website. Effect: The deficiency in internal controls over monitoring the MCOs? audited financial statements increases the likelihood that inappropriate uses of Medicaid and CHIP funds may occur and not be detected by management in a timely manner. Furthermore, noncompliance with federal regulations may result in the grantor penalizing the DCH for noncompliance by suspending or terminating the award or withholding future awards. Recommendation: The DCH should revise the current contracts with MCOs to include a clause requiring MCOs to submit on an annual basis, to the DCH, audited financial reports specific to the Medicaid contract. In addition, the DCH should implement policies and procedures to ensure the obtention of the required MCOs audited financial reports and that the results of the periodic audits are posted to the State?s website. Views of Responsible Officials: We concur with this finding.
2021-028 Improve Controls over Managed Care Organization Financial Audits Federal Agency: U.S. Department of Health and Human Services State Entity: Department of Community Health 2021-028 Improve Controls over Managed Care Organization Financial Audits Federal Agency: U.S. Department of Health and Human Services State Entity: Department of Community HealthDCH has amended its Care Management Organizations (CMO) Contract to include provisions which require the CMOs to provide annual audited financial statements to DCH. DCH will post all required reports to the DCH website.
Our audit of the Medicaid program revealed that improper payments were made to Medicaid providers after beneficiaries? deaths. Using data analytics, we compared the DMF to claims made during the fiscal year to identify claims made after the date of death. We identified a total of 1,025 claims that were paid to providers for 243 unique members after the date of death. We used a nonstatistical sampling method to select a random sample of 60 claims from this population and tested the sample along with 12 individually significant items to determine if the claims were for services provided before the date of death. We found that the DCH made payments to providers for 72 Medicaid claims with service dates after the date of death resulting in overpayments in which the funds were not recouped. Questioned Costs: Known questioned costs of $132,069 were identified for benefit payments made to providers for the 72 Medicaid claims with service dates after beneficiaries? deaths. Because all benefit payments tested were deemed unallowable, we project the likely questioned costs to be the entire population of claims paid to providers after the date of death, which totaled $196,207. The Federal and State share of likely questioned costs is approximately $143,171 and $53,036, respectively. Cause: System modifications that the DCH requested to be made by its third-party vendor within GAMMIS, which should have prohibited payments from being made for dates of service after a member?s date of death, were implemented during the audit period. However, upon subsequent review the DCH identified a defect with the quarterly automated date of death claims adjustments process and determined additional changes are needed to prohibit payments from being made for dates of service after a member?s date of death. Effect: The improper Medicaid payments resulted in noncompliance with federal regulations and questioned costs. Weaknesses in controls over Medicaid payments also increase the risk of improper payments due to error or fraud that may need further investigation. In addition, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. Recommendation: The DCH management should continue to dedicate the necessary resources and execute their plan to ensure that modifications to the date of death processes within GAMMIS are implemented appropriately and that Medicaid benefit payments to providers are not made after beneficiaries? deaths. For periods prior to the implementation of the GAMMIS system modifications to address the defect identified, the DCH should perform procedures to compare the DMF to claims made after the date of death and analyze the results to identify improper payments. Additionally, the DCH should investigate and recover funds for all overpayments and if necessary, refer to the Georgia Medicaid Fraud Control Unit for further investigation into any potential provider fraud or abuse. The DCH should also consult with the grantor to discuss whether questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (continued) STATE ENTITY: DEPARTMENT OF COMMUNITY HEALTH (continued) 2021-029 Improve Controls over Medicaid Payments after Date of Death Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 ? COVID -19 ? Medical Assistance Program (Medicaid: Title XIX) Federal Award Number: 2005GA5MAP (Year 2020), 2105GA5MAP (Year 2021) Questioned Costs: $132,069.00 Repeat of Prior Year Finding: 2020-025, 2019-022 Description: The Department of Community Health made improper payments to Medicaid providers after beneficiaries? deaths. Background Information: The Department of Community Health (DCH) administers the State?s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of Georgia?s largest public assistance programs with federal and state funds totaling approximately $12 billion for fiscal year 2021. The Social Security Administration (SSA) maintains the national record of death information called the Death Master File (DMF). The DMF is provided to States via a data exchange agreement. The DMF interfaces with the Georgia Medicaid Management Information System (GAMMIS) to update the beneficiary profiles. Additionally, the State Office of Vital Records submits an electronic file updated with the date of death that also interfaces with GAMMIS. The DCH has a process in place to identify when a beneficiary?s profile is updated with the date of death and to reverse payments to managed-care organizations for claims made after the beneficiary?s death. As part of our fiscal year 2021 audit, we followed up on the DCH?s efforts to implement corrective action plans in response to the prior year findings in which we reported that the DCH made improper payments to Medicaid providers after beneficiaries? deaths. However, the DCH was unable to fully implement their corrective action plan and apply modifications to GAMMIS prior to fiscal year-end. Criteria: As a recipient of federal awards, the DCH is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, the Uniform Guidance, Section 200.53 - Improper payments states: Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. An improper payment includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper. Pursuant to Title 42 CFR Part 433, State Fiscal Administration, Subpart F ? Refunding of Federal Share of Medicaid Overpayments to Providers Section 433.304, an overpayment means the amount paid by a Medicaid agency to a provider which is in excess of the amount that is allowable for services furnished. Because medically necessary services cannot be provided after a beneficiaries? death, no medical services are allowable after a beneficiaries? death and any payment to a provider would result in an overpayment. Condition: Our audit of the Medicaid program revealed that improper payments were made to Medicaid providers after beneficiaries? deaths. Using data analytics, we compared the DMF to claims made during the fiscal year to identify claims made after the date of death. We identified a total of 1,025 claims that were paid to providers for 243 unique members after the date of death. We used a nonstatistical sampling method to select a random sample of 60 claims from this population and tested the sample along with 12 individually significant items to determine if the claims were for services provided before the date of death. We found that the DCH made payments to providers for 72 Medicaid claims with service dates after the date of death resulting in overpayments in which the funds were not recouped. Questioned Costs: Known questioned costs of $132,069 were identified for benefit payments made to providers for the 72 Medicaid claims with service dates after beneficiaries? deaths. Because all benefit payments tested were deemed unallowable, we project the likely questioned costs to be the entire population of claims paid to providers after the date of death, which totaled $196,207. The Federal and State share of likely questioned costs is approximately $143,171 and $53,036, respectively. Cause: System modifications that the DCH requested to be made by its third-party vendor within GAMMIS, which should have prohibited payments from being made for dates of service after a member?s date of death, were implemented during the audit period. However, upon subsequent review the DCH identified a defect with the quarterly automated date of death claims adjustments process and determined additional changes are needed to prohibit payments from being made for dates of service after a member?s date of death. Effect: The improper Medicaid payments resulted in noncompliance with federal regulations and questioned costs. Weaknesses in controls over Medicaid payments also increase the risk of improper payments due to error or fraud that may need further investigation. In addition, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. Recommendation: The DCH management should continue to dedicate the necessary resources and execute their plan to ensure that modifications to the date of death processes within GAMMIS are implemented appropriately and that Medicaid benefit payments to providers are not made after beneficiaries? deaths. For periods prior to the implementation of the GAMMIS system modifications to address the defect identified, the DCH should perform procedures to compare the DMF to claims made after the date of death and analyze the results to identify improper payments. Additionally, the DCH should investigate and recover funds for all overpayments and if necessary, refer to the Georgia Medicaid Fraud Control Unit for further investigation into any potential provider fraud or abuse. The DCH should also consult with the grantor to discuss whether questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
2021-029 Improve Controls over Medicaid Payments after Date of Death Federal Agency: U.S. Department of Health and Human Services State Entity: Department of Community Health The Department (?DCH?) modified its date of death processes within the Georgia Medicaid Management Information System (?GAMMIS?) to either disallow or recoup payments made to Fee-for-Service providers when the submitted claim reflects a date of service after the member?s date of death. DCH opened CSR #1563 on 8/26/2020. Through CSR #1563, GAMMIS began identifying Medicaid/PeachCare for Kids members on the Social Security Death Master File. Members who are identified as being on the Social Security Death Master file are removed from the list of active Medicaid/PeachCare for Kids members. Accordingly, only claims with dates of service prior to the date of death will process. CSR #1563 was implemented and moved into production on March 1, 2021. Upon subsequent review, we identified a defect with the quarterly automated date of death claims adjustments process. The defect will be corrected on March 30, 2022.
2020-025
Our audit of the Medicaid program revealed deficiencies in the capitation payments paid to MCOs for Managed Care members with Medicare insurance coverage. We obtained Medicare coverage information from the DCH for all Medicaid-eligible members. Using data analytics, we identified a total of 3,120 potential capitation premium payments made on behalf of members who had Medicare coverage during the same month as their monthly managed care capitation payment. From this population, we tested a random sample of 60 members to determine if the DCH made monthly managed care premium payments for the members during the same time period the member?s Medicare coverage was effective. We found that the DCH made improper payments to MCOs for all 60 Managed Care members tested and these funds were not recouped. Additionally, we noted for 52 out of 60 members tested, a retroactive Medicare effective date was issued, which was during the time period that managed care payments were made to MCOs. The DCH did discontinue paying the MCO after it received notification from Medicare of the member?s eligibility; however, they did not recoup the payments made to the MCOs for the retroactive period of Medicare coverage. Furthermore, we noted that for eight out of 60 members tested, improper payments continued to be made after Medicare notified the DCH of the member?s Medicare eligibility. Questioned Costs: Known questioned costs of $161,456 were identified for the capitation payments paid to MCOs for the 60 Managed Care members that were during the same time the Managed Care member was enrolled in Medicare. The Federal and State share of known questioned costs is approximately $118,357 and $43,099, respectively. Because all sample amounts tested were deemed to be known questioned costs, the total population amount of $1,435,238 is projected to be likely questioned costs. The Federal and State share of likely questioned costs is approximately $1,052,119 and $383,119, respectively. The projected likely questioned costs are based on the testing of a sample of 60 Managed Care members that were selected using a nonstatistical sampling method. Cause: Technical guidance from the Centers for Medicare and Medicaid Services (CMS) has been requested and is needed before the DCH?s third-party vendor can move forward with additional identified GAMMIS modifications needed to fully implement the process to recoup capitation payments for Medicare eligible recipients. Effect: Without effective controls in place, the DCH increases its risk of providing and not detecting improper payments to MCOs. The improper capitation payments resulted in noncompliance with federal regulations and questioned costs. Improper payments could occur for an ineligible recipient that are unallowable and cannot be claimed for federal reimbursement. In addition, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. Recommendation: The DCH management should continue to dedicate the necessary resources and execute their plan to ensure that modifications to retroactively recoup capitation payments from its MCOs upon receipt of notice that a member is eligible for Medicare are implemented appropriately within GAMMIS. For periods prior to the implementation of the GAMMIS system modifications, the DCH should perform analytical procedures over Medicare effective dates for Managed Care members to determine whether capitation payments have been recouped. Additionally, the DCH should investigate and recover funds for all improper payments. The DCH consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (continued) STATE ENTITY: DEPARTMENT OF COMMUNITY HEALTH (continued) 2021-030 Improve Controls over Medicaid Capitation Payments for Medicare Members Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 ? COVID -19 ? Medical Assistance Program (Medicaid: Title XIX) Federal Award Number: 2005GA5MAP (Year 2020), 2105GA5MAP (Year 2021) Questioned Costs: $161,456.00 Repeat of Prior Year Finding: 2020-026, 2019-023 Description: The Department of Community Health made improper capitation payments for Medicaid Managed Care members with Medicare insurance coverage. Background Information: The Department of Community Health (DCH) administers the State?s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of Georgia?s largest public assistance programs with federal and state funds totaling $12 billion for fiscal year 2021. The DCH, the State?s Medicaid agency, administers Georgia?s managed-care program. The program is a partnership between the DCH and private managed care organizations (MCOs). The State pays a monthly fixed rate per person (capitation rate) without regard to the actual medical services utilized to cover the costs of Medicaid claims. Managed care is a prepaid, comprehensive system of medical and health care delivery, including preventive, primary, specialty and ancillary health care services. The program is designed to reduce the cost of providing health benefits, improve the quality of care and deliver health care to clients. Capitation payments for the year totaled $5.2 billion (federal and state). As part of our fiscal year 2021 audit, we followed up on the DCH?s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DCH made improper capitation payments for Medicaid Managed Care members with Medicare insurance coverage. However, the DCH was unable to fully implement their corrective action plan and apply modifications to the Georgia Medicaid Management Information System (GAMMIS) prior to fiscal year-end. Criteria: As a recipient of federal awards, the DCH is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 ? Internal Controls. Additionally, the Uniform Guidance, Section 200.53 - Improper payments states: Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and improper payments includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper. Title 42 CFR Chapter 7, Social Security, Subchapter XIX ? Grants to States for Medical Assistance Program, 1396u-2 ? Provisions relating to managed care, states in part: a state may not require under paragraph (1) the enrollment in a managed care entity of an individual who is a qualified Medicare beneficiary (as defined in section 1396d(p)(1) of this title) or an individual otherwise eligible for benefits under subchapter XVIII. Further, according to the DCH?s State Plan, Medicare recipients should not be enrolled in managed care, and any monthly premium payments made for Medicare recipients are unallowable. Condition: Our audit of the Medicaid program revealed deficiencies in the capitation payments paid to MCOs for Managed Care members with Medicare insurance coverage. We obtained Medicare coverage information from the DCH for all Medicaid-eligible members. Using data analytics, we identified a total of 3,120 potential capitation premium payments made on behalf of members who had Medicare coverage during the same month as their monthly managed care capitation payment. From this population, we tested a random sample of 60 members to determine if the DCH made monthly managed care premium payments for the members during the same time period the member?s Medicare coverage was effective. We found that the DCH made improper payments to MCOs for all 60 Managed Care members tested and these funds were not recouped. Additionally, we noted for 52 out of 60 members tested, a retroactive Medicare effective date was issued, which was during the time period that managed care payments were made to MCOs. The DCH did discontinue paying the MCO after it received notification from Medicare of the member?s eligibility; however, they did not recoup the payments made to the MCOs for the retroactive period of Medicare coverage. Furthermore, we noted that for eight out of 60 members tested, improper payments continued to be made after Medicare notified the DCH of the member?s Medicare eligibility. Questioned Costs: Known questioned costs of $161,456 were identified for the capitation payments paid to MCOs for the 60 Managed Care members that were during the same time the Managed Care member was enrolled in Medicare. The Federal and State share of known questioned costs is approximately $118,357 and $43,099, respectively. Because all sample amounts tested were deemed to be known questioned costs, the total population amount of $1,435,238 is projected to be likely questioned costs. The Federal and State share of likely questioned costs is approximately $1,052,119 and $383,119, respectively. The projected likely questioned costs are based on the testing of a sample of 60 Managed Care members that were selected using a nonstatistical sampling method. Cause: Technical guidance from the Centers for Medicare and Medicaid Services (CMS) has been requested and is needed before the DCH?s third-party vendor can move forward with additional identified GAMMIS modifications needed to fully implement the process to recoup capitation payments for Medicare eligible recipients. Effect: Without effective controls in place, the DCH increases its risk of providing and not detecting improper payments to MCOs. The improper capitation payments resulted in noncompliance with federal regulations and questioned costs. Improper payments could occur for an ineligible recipient that are unallowable and cannot be claimed for federal reimbursement. In addition, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. Recommendation: The DCH management should continue to dedicate the necessary resources and execute their plan to ensure that modifications to retroactively recoup capitation payments from its MCOs upon receipt of notice that a member is eligible for Medicare are implemented appropriately within GAMMIS. For periods prior to the implementation of the GAMMIS system modifications, the DCH should perform analytical procedures over Medicare effective dates for Managed Care members to determine whether capitation payments have been recouped. Additionally, the DCH should investigate and recover funds for all improper payments. The DCH consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
2021-030 Improve Controls over Medicaid Capitation Payments for Medicare Members Federal Agency: U.S. Department of Health and Human Services State Entity: Department of Community Health DCH opened CSR #1561 on 8/6/2020. Additional modifications are required before we can fully implement the process to recoup capitation payments for Medicare eligible recipients. Specifically, further work is needed regarding the removal of Part D Coverage when no Part A and Part B coverage exist. We have received technical assistance from CMS regarding the removal of Part D data and the impact to the member?s file in GAMMIS. Gainwell Technologies is creating the required change orders and tasks. All changes will be moved into production by June 30, 2022.
2020-026
See Financial Finding at 2021-003. Cause: See Financial Finding at 2021-003. Effect: See Financial Finding at 2021-003. Recommendation: See Financial Finding at 2021-003. Views of Responsible Officials: We concur with the finding as it is only partially resolved.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (continued) STATE ENTITY: DEPARTMENT OF COMMUNITY HEALTH (continued) 2021-031 Continue to Strengthen Application Risk Management Program Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 ? COVID -19 ? Medical Assistance Program (Medicaid: Title XIX) Federal Award Number: 2105GA5MAP (Year: 2021), 2105GA5ADM (Year: 2021), 2005GA5MAP (Year: 2020), 2005GA5ADM (Year: 2020), 1905GA5MAP (Year: 2019), 1905GA5ADM (Year: 2019) Questioned Costs: None Identified Repeat of Prior Year Findings: 2020-028, 2019-024, 2018-026, 2017-037, 2016-044 Description: The Department of Community Health should continue to strengthen controls over its application risk management program. Background Information: See Financial Finding at 2021-003. Criteria: See Financial Finding at 2021-003. Condition: See Financial Finding at 2021-003. Cause: See Financial Finding at 2021-003. Effect: See Financial Finding at 2021-003. Recommendation: See Financial Finding at 2021-003. Views of Responsible Officials: We concur with the finding as it is only partially resolved.
2021-031 Continue to Strengthen Application Risk Management Program Federal Agency: U.S. Department of Health and Human Services State Entity: Department of Community Health The Agency has identified and secured the necessary matching State funds along with approved Federal funds required to implement its CAP in order to fully remediate the audit finding by December 31, 2022. As a part of the remediation, the Agency is moving forward with acquiring the identified internal cybersecurity resources and contracted third-party security services required to fully remediate the audit finding within the identified timeframe. The DCH Cybersecurity Office continues to monitor electronic visit verification (EVV) information security compliance through the following: ? Office of Information Security (OIS) reviewed and approved the Netsmart SSP and CMS certification Security assessment report and Plan of Action and Milestones (POAM). ? Currently tracking the remediation of one moderate severity assessment compliance gap scheduled for remediation by the end of March 2022. EVV security and privacy certification was approved by Centers for Medicare and Medicaid Services (CMS). ? EVV system security plan (SSP) and POAM was reviewed with GTA OIS. No additional security compliance recommendations were provided by GTA OIS. ? The EVV Solution Service Provider, Conduent/Netsmart has implement a National Institute of Standards and Technology (NIST) compliant multi-factor authentication (MFA) solution for all in scope privileged accounts.
2020-028
The DCH contracts with a third-party vendor to perform desk reviews on the inpatient hospital providers? cost reports submitted. In response to our recommendations regarding the establishment of procedures associated with the completion of desk reviews and field audits for inpatient Medicaid providers, the DCH ensured that all required desk reviews were completed appropriately and within the necessary timeframe during the fiscal year under review. However, field audits of participating inpatient hospital providers were not performed as required by the current State Plan. Cause: The DCH had turnover in management personnel and did not have procedures in place to ensure that field audits were performed in accordance with the State Plan. During the current fiscal year, the DCH was in the process of revising its State Plan and contract with its third-party vendor to remove language requiring field audits of inpatient hospital providers to be conducted and replacing it with language requiring desk or focus reviews. However, the revisions did not make it through the DCH review and approval process prior to the end of the fiscal year as the revisions to the State Plan were made in January 2021 and will not go into effect until July 1, 2021. Effect: Since cost reports may be used as the basis to establish reimbursement rates, the rates used may contain errors which could result in improper payments. In addition, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. This may prevent inpatient hospital providers from receiving benefit payments in the future. Recommendation: Because the DCH management executed their plan to revise the State Plan and contract with its third-party vendor after year-end, the DCH should ensure that the required desk or focus reviews are performed in accordance with the revised State Plan going forward. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (continued) STATE ENTITY: DEPARTMENT OF COMMUNITY HEALTH (continued) 2021-032 Improve Controls over Inpatient Medicaid Payments Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 ? COVID -19 ? Medical Assistance Program (Medicaid: Title XIX) Federal Award Number: 2005GA5MAP (Year: 2020), 2105GA5MAP (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: 2020-029, 2019-025 Description: The Department of Community Health does not have adequate controls in place to ensure the required inpatient hospital field audits are performed in accordance with the State Plan. Background Information: The Department of Community Health (DCH) is responsible for administering the Medicaid program under the State Plan approved by the federal Centers for Medicare & Medicaid Services (CMS). The State Plan is a comprehensive written statement describing the nature, scope, and basic requirements for the Medicaid program. At any time, the DCH can propose changes to the State Plan by submitting a State Plan Amendment to the CMS. As part of the State Plan, the DCH is responsible for establishing standards and methodologies for reimbursing inpatient hospital providers based on payment rates that represent the cost to efficiently and economically operate such facilities and provide services to Medicaid beneficiaries. The DCH requires all inpatient hospital providers to submit an annual cost report summarizing cost and patient day information for the reporting year. These cost reports may be used to establish payment rates. A total of 141 cost reports were submitted by the Medicaid inpatient hospital providers during the year. For fiscal year 2021, inpatient Medicaid payments totaled approximately $1.2 billion. As part of our fiscal year 2021 audit, we followed up on the DCH?s efforts to implement corrective action plans in response to the prior year findings in which we reported that DCH did not perform the required inpatient hospital field audits per the State Plan. Although DCH was unable to fully implement their corrective action plan prior to fiscal year-end, we noted that ongoing efforts have been made and the State Plan has been revised with an effective date of July 1, 2021. Criteria: As a recipient of federal awards, the DCH is required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 ? Internal Controls. Pursuant to 42 CFR Section 447.253(g), the DCH is required to perform periodic audits of financial and statistical records of participating inpatient hospitals in accordance with the audit requirements specified in the State Plan. These audits are crucial to ensuring the established payment rates are proper. The Georgia Medicaid State Plan, Section 1C, Attachment 4.19A-Methods and Standards for Establishing Payment Rates Inpatient Services requires DCH to contract annually for the performance of desk reviews and field audits. Condition: The DCH contracts with a third-party vendor to perform desk reviews on the inpatient hospital providers? cost reports submitted. In response to our recommendations regarding the establishment of procedures associated with the completion of desk reviews and field audits for inpatient Medicaid providers, the DCH ensured that all required desk reviews were completed appropriately and within the necessary timeframe during the fiscal year under review. However, field audits of participating inpatient hospital providers were not performed as required by the current State Plan. Cause: The DCH had turnover in management personnel and did not have procedures in place to ensure that field audits were performed in accordance with the State Plan. During the current fiscal year, the DCH was in the process of revising its State Plan and contract with its third-party vendor to remove language requiring field audits of inpatient hospital providers to be conducted and replacing it with language requiring desk or focus reviews. However, the revisions did not make it through the DCH review and approval process prior to the end of the fiscal year as the revisions to the State Plan were made in January 2021 and will not go into effect until July 1, 2021. Effect: Since cost reports may be used as the basis to establish reimbursement rates, the rates used may contain errors which could result in improper payments. In addition, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. This may prevent inpatient hospital providers from receiving benefit payments in the future. Recommendation: Because the DCH management executed their plan to revise the State Plan and contract with its third-party vendor after year-end, the DCH should ensure that the required desk or focus reviews are performed in accordance with the revised State Plan going forward. Views of Responsible Officials: We concur with this finding.
2021-032 Improve Controls over Inpatient Medicaid Payments Federal Agency: U.S. Department of Health and Human Services State Entity: Department of Community Health The State Plan Amendment 21-0004 was approved by CMS on June 21, 2021 with an effective date of July 1, 2021. This State Plan Amendment allows desk reviews/audits an focus reviews in lieu of on-site field audits. Current technology allows audits to be performed remotely instead of one-site or in person. This was an issue for SFY2021.
2020-029
Our audit of the Medicaid program revealed deficiencies in the performance of eligibility determinations for SSI Ex Parte members. During fiscal year 2021, the DCH paid Medicaid benefits totaling $10,083,737 for 46,174 claims transactions. We used a nonstatistical sampling method to select a random sample of 60 Ex Parte benefit payments from this population and tested the sample to determine if eligibility determinations were performed appropriately. For 11 out of 60 SSI Ex Parte payments tested, we found that the DFCS did not perform the required eligibility determinations prior to payments being made. However, as a result of the continued consequences of the COVID-19 pandemic, a public health state of emergency was in place during the fiscal year and did not allow Medical Assistance cases to be terminated. Therefore, no questioned costs were identified for benefit payments made to the 11 SSI Ex Parte members whose eligibility was not appropriately redetermined. Cause: The processes that DFCS ran in the Gateway system did not capture all the CMD members in the system who needed a determination. The query used to capture CMD members was not written in a way to identify all CMD members. Furthermore, the DFCS is in the process of modifying the query to identify all CMD members that were missed by the original query. Effect: The deficiencies in eligibility determinations resulted in noncompliance with federal regulations. Also, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. In addition, the DCH may be providing Medicaid benefits to ineligible individuals and claiming federal reimbursement for unallowable expenditures. Recommendation: The DCH and DHS management should strengthen oversight of the eligibility determinations performed by the DFCS for SSI Ex Parte members to make certain they are being performed timely and as required. Specifically, management should oversee a reconciliation process between members with completed CMDs to members listed on the Ex Parte daily and monthly Determination Reports. In addition, the DHS management should continue to provide training associated with these compliance requirements to new hires. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (continued) STATE ENTITY: DEPARTMENT OF COMMUNITY HEALTH & STATE ENTITY: DEPARTMENT OF HUMAN SERVICES 2021-033 Improve Controls over Medicaid Eligibility Determinations for Ex Parte Members Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 ? COVID -19 ? Medical Assistance Program (Medicaid: Title XIX) Federal Award Number: 2005GA5MAP (Year 2020), 2105GA5MAP (Year 2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2020-033, 2019-027, 2018-029 Description: The Department of Community Health and Department of Human Services did not have effective internal controls in place to ensure the required continuing Medicaid eligibility determinations are performed for Supplemental Security Income Ex Parte members. Background Information: The Department of Community Health (DCH) administers the State?s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of Georgia?s largest public assistance programs with federal and state funds totaling approximately $12 billion for fiscal year 2021. Eligibility for the Medicaid program is determined by the Division of Family and Children Services (DFCS), a division within the Department of Human Services (DHS), which has offices in each of the 159 counties in the State of Georgia. Individuals who are eligible for Supplemental Security Income (SSI) are also eligible for the Medicaid benefits, and those whose SSI benefits are terminated or denied by the Social Security Administration are SSI Ex Parte members for the Medicaid program. For those members, the DCH makes temporary determinations of continued eligibility under a new Ex Parte Medicaid Class of Assistance in the Georgia Medicaid Management Information System (GAMMIS). The DFCS is responsible for performing a Continuing Medicaid Determination (CMD) for each new SSI Ex Parte member. The DFCS uses the daily Ex Parte Determination Reports generated by GAMMIS to identify the new SSI Ex Parte members that require a CMD. GAMMIS also generates monthly Ex Parte Non-Confirmation Reports, which identify all entries from the Ex Parte Determination Reports that are over 30-days old and have not yet been acted upon. When a CMD is complete, the DFCS enters the individual in the Georgia Gateway eligibility system and an approval or denial notice is generated. GAMMIS is updated through the Georgia Gateway interface when eligibility for a member is approved. When eligibility is denied, DFCS sends the denial notice to the DCH which triggers the removal of the denied member from GAMMIS. As part of our fiscal year 2021 audit, we followed up on the DCH?s efforts to implement corrective action plans in response to the prior year finding in which we reported that the DCH did not perform the required continuing eligibility determination for SSI Ex Parte members. Although the DCH was unable to fully implement their corrective action plan prior to fiscal year-end, we noted that significant progress in training various levels of Medicaid workers on the correct procedures for handling Ex-Parte cases had occurred. Criteria: As recipients of federal awards, both the DCH and the DHS are required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 ? Internal Controls. The eligibility determination requirements for SSI Ex Parte members are addressed in Chapter 2700, Section 50 - DCH Reports - Ex Parte Lists of the DHS Medicaid Manual. In accordance with Section 50 of the Medicaid Manual, the DFCS is required to perform eligibility determinations of those members whose SSI benefits are terminated or denied. Condition: Our audit of the Medicaid program revealed deficiencies in the performance of eligibility determinations for SSI Ex Parte members. During fiscal year 2021, the DCH paid Medicaid benefits totaling $10,083,737 for 46,174 claims transactions. We used a nonstatistical sampling method to select a random sample of 60 Ex Parte benefit payments from this population and tested the sample to determine if eligibility determinations were performed appropriately. For 11 out of 60 SSI Ex Parte payments tested, we found that the DFCS did not perform the required eligibility determinations prior to payments being made. However, as a result of the continued consequences of the COVID-19 pandemic, a public health state of emergency was in place during the fiscal year and did not allow Medical Assistance cases to be terminated. Therefore, no questioned costs were identified for benefit payments made to the 11 SSI Ex Parte members whose eligibility was not appropriately redetermined. Cause: The processes that DFCS ran in the Gateway system did not capture all the CMD members in the system who needed a determination. The query used to capture CMD members was not written in a way to identify all CMD members. Furthermore, the DFCS is in the process of modifying the query to identify all CMD members that were missed by the original query. Effect: The deficiencies in eligibility determinations resulted in noncompliance with federal regulations. Also, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. In addition, the DCH may be providing Medicaid benefits to ineligible individuals and claiming federal reimbursement for unallowable expenditures. Recommendation: The DCH and DHS management should strengthen oversight of the eligibility determinations performed by the DFCS for SSI Ex Parte members to make certain they are being performed timely and as required. Specifically, management should oversee a reconciliation process between members with completed CMDs to members listed on the Ex Parte daily and monthly Determination Reports. In addition, the DHS management should continue to provide training associated with these compliance requirements to new hires. Views of Responsible Officials: We concur with this finding.
2021-033 Improve Controls over Medicaid Eligibility Determinations for Ex Parte Members Federal Agency: U.S. Department of Health and Human Services State Entity: Various State Agencies: Department of Community Health Department of Human Services DFCS has identified the remaining members, who had not received a Continued Medicaid Determination (CMD) prior to the implementation of system automation, and has begun work on their CMDs.
2020-033
During our engagement, we obtained copies of the reports issued by both the DOAS and the OIG. The DOAS audit determined that from March 1, 2020 to February 28, 2021, the DOL spent $959,175 on p-card food purchases. The DOL spent an additional $153,627 from March 1, 2021, until June 11, 2021, for a total of $1.1 million dollars. This amount was spent on employees who were fed daily for approximately 285 days. The audit details noncompliance with the Statewide P-card Policy, SAO Group Meal Policy, and Statewide Travel Policy. In addition, the audit reports instances of insufficient documentation. The OIG also examined over $1.1 million spent to purchase meals for each of the DOL?s reported 1,026 employees over a nearly 15-month period. The purchases continued without interruption until June 11, 2021, when the DOAS suspended the DOL?s ability to buy meals using a p-card. The OIG inquired into the origin of the funds utilized for the meal purchases. The Governor?s Office of Planning and Budget (OPB) confirmed that approximately $567,000 came from the DOL?s annual state funds appropriation and most of the remaining funds, which totaled approximately $519,000, originated from the federal UI grants provided to the DOL. Our review of the DOL?s accounting records revealed that $516,722 in unallowable meal expenditures were paid with federal award funds during the fiscal year under review. Further, the DOL could not provide the grant award numbers to which the expenditures were charged or any documentation of correspondence with the U.S. Department of Labor to request authorization or make the grantor aware that the DOL planned to use and/or used federal funds for these types of expenditures. Questioned Costs: Questioned costs of $516,722 were identified for unallowable expenditures. The following Assistance Listing Numbers were affected by these questioned costs: 17.225 and 17.225 ? COVID-19. Cause: The DOL management determined the costs were reasonable in the interest of public safety for employees, as well as to meet the critical need to maintain a desirable level of productivity with an unprecedented demand for the DOL services, to use funds to provide lunches on the premises for employee health and welfare during both a pandemic and an unemployment crisis. Effect: The expenditure of federal funds for unallowable purposes resulted in noncompliance with federal regulations and questioned costs. In addition, grant provisions allow the grantor to penalize the DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent the DOL from effectively administering the UI program in the future. The U.S. Department of Labor may require repayment of costs that are determined to be unallowable and the State of Georgia could be responsible for such repayment. Recommendation: The DOL should ensure that all current and future business practices follow the established policies and procedures of the Uniform Guidance, the U.S. Department of Labor, and the State of Georgia. We recommend that the DOL contact the U.S. Department of Labor for the guidance and authorization to use federal funds when the expenditure is deemed uncommon and/or extraordinary. Views of Responsible Officials: We do not concur with this finding. The State Auditor presents language from the Uniform Guidance, Section 200.404 regarding reasonable costs, stating specifically, A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under circumstances prevailing at the time the decision was made to incur the cost. To that statement we offer the following information which must also be considered under these circumstances: ? EUISAA Emergency Grants ($1,000,000,000 to the states) amended Social Security Act, adding subsection (h) to 42 USC Section 1103: o 42 USC 1103(h)(4)- ?Any amount transferred to the account of a State under this subsection may be used by such State only for the administration of its unemployment compensation law, including by taking such steps as may be necessary to ensure adequate resources in periods of high demand.? ? USDOL ETA Website COVID-19 FAQ?s https://www.dol.gov/agencies/eta/coronavirus#adminflex ? ALL Grants ? Administrative Flexibilities Section: o Question: Can grantees repurpose grant funds to offset additional expenses related to COVID-19 such as increased paid time off or overtime for staff? o Answer: (last sentence) ?Grant recipients should not place their staff in danger or a hazardous setting.? The condition statements reference a review of P-card purchases conducted by the state Department of Administrative Services reviewing food purchases made on behalf of GDOL staff during a declared international, national and state emergency. The COVID-19 pandemic emergency created a perfect storm for GDOL and we continue to deal with residual effects of that perfect storm to this day. The event not only caused an epic increase in Unemployment Insurance (UI) claims for benefits due to the expansion of new federal programs but at the same time created a life altering impact to GDOL staff and their families. We must note for the record that our agency was grossly understaffed after years of reduced state and federal appropriations of administrative dollars and no assistance was offered through the legislative appropriation process nor did we receive distribution of adequate CARES act funding for critical staffing and operational needs from the State. While many employees were able to work from the safety of their homes, GDOL had to meet that challenge head on and provide critically needed financial assistance to eligible, suffering fellow Georgians. GDOL had the critical responsibility to serve customers filing claims at a rate and volume never seen in history. GDOL processed about 6 million UI benefit claims, an amount exceeding the sum total of all claims processed in the past ten years combined. More than 23 billion dollars in UI benefits have been paid. This amount exceeds the total amount of benefits paid in the previous 82 years combined. To accomplish this potentially crippling feat, GDOL rehired experienced retirees, reassigned staff from other duties, and used contractors where appropriate. Consistent with the practice of other state labor departments, our employees were considered essential employees and continued to report to the office even as other state agencies and their employees (such as OIG, DOAS and DOAA) allowed their employees to work from the safety of their homes. GDOL initiated efforts to keep our essential office employees safe during this time. For example, after securing approval from the Department of Administrative Services (DOAS) to provide lunches for our employees, GDOL began providing lunch to its workers in order for employees to remain in their offices and continue to sustain the critically required claims process. Providing lunch and asking staff to remain at their desks allowed us to realize more than 230,000 additional work hours to process UI claims and interact with Georgians in desperate need of our services. The increase in labor hours is equivalent to approximately 90 additional full-time, experienced staff with an estimated savings of eight (8) million dollars in administrative costs. GDOL staffing during the period consisted of 1,100 employees, over 60 security guards and more than 400 contractors. We invested an average of one thousand dollars per employee over a 15-month period and were able to achieve and sustain an exceptionally high operational capacity. This translates to $67 per month per employee invested to process six (6) million UI claims and deliver twenty-three (23) billion dollars in UI benefits faster than most states of comparable size in the midst of persistent threats to personal safety, exposure of employee home addresses on social media, property vandalism, and protests. As offered in GDOL?s response to the DOAS report, GDOL did not begin this process before seeking and securing authorization from DOAS to make the purchases using the P-card. GDOL followed DOAS? guidelines entering invoices each business day in the DOAS proprietary TGM statewide system. GDOL complied with SAO per diem guidelines of $7 or $9 for lunches (depending on office location) with limited exceptions that occurred in the initial deployment of the process. Any queries for clarification received from DOAS over the 15 months this occurred were quickly and fully addressed. Wherever possible, GDOL utilized small businesses struggling during the pandemic and the Georgia State University cafeteria. We also note here that the State Accounting Office finally modified its per diem guidelines effective February 1, 2022 to change the lunch per diem to $14 after decades at the abysmally lower rate. We continued to follow emergency Coronavirus mandates and Executive Orders issued by the Governor?s Office which remained in effect in June 2021. We also wanted to reduce the need to make stops on the commute to and from work. Any employee illness could negatively impact the operation. We took the responsibility to actively maintain a safe workplace. Even OIG admits GDOL?s reasons for providing lunches were justifiable before asserting that the justification somehow morphed into `waste? in violation of the ?gratuities? clause upon the approval of the COVID vaccines in March/April 2021. OIG also admitted that agencies have discretion with regards to how administrative assessment monies are spent. The federal dollars came from emergency administrative funds provided to the states by USDOL with broad discretion to states regarding the use of such funds to ensure adequate resources were available during this national historic emergency. This process was thoughtfully considered and undertaken in a genuine effort to reduce unnecessary workplace exposure to COVID and markedly enhanced claim processing productivity. There was no vaccine available during the first 12 months of this activity. When vaccines were introduced, they were limited to certain populations who, for the most part, were not in the workplace processing UI claims. The decision was made to deliver lunches to all of our locations as grocery stores experienced greatly diminished product availability, restaurants closed due to the shrinking workforce, no relief was in sight and no one had any reasonable prediction on how long this international crisis would last. GDOL could not and did not close down its processes and wait for the crisis to pass. That option was never a consideration. We have a responsibility to our fellow Georgians and to our employees. As an agency, we have experienced 382 cases of COVID, twenty-six (26) of those cases resulted in hospitalizations and unfortunately TEN (10) members of our staff paid the ultimate price and lost their lives to the Coronavirus. These ten staff members were parents, grandparents, siblings, friends, neighbors, and community partners. Four of these deaths occurred after the provision of lunches ended on June 10, 2021. These ten staffers were people engaged in the everyday life. We are certain that their surviving loved ones would find the categorization of providing them a delivered meal while they were at their desk working in a pandemic as a waste or abuse to be absolutely abhorrent. In the opinion of these external reviewers, staff at GDOL are undoubtedly dispensable. We strongly disagree that investing in the health and safety of our employees was reckless, grossly negligent, needless, imprudent, wasteful and certainly not unreasonable. The loss of life and staff infections we suffered would likely have been far greater had we not taken the strategic approach to limit employee ingress and egress, provide meals and encourage social distancing in the workplace. Our attempt to protect our invaluable human resources by making the decision to reduce a known risk was neither abusive or unreasonable but an act of genuine compassion, a substantial benefit to the state, and actually more than reasonable given the limited alternatives. Again, this investment was most beneficial as the return yielded hundreds of thousands of additional hours in critically needed, cost-efficient productivity. Such disregard for humankind does little more than contribute to the reasons that so many are leaving the workplace and causes employers in every sector to suffer as a result. GDOL employees were positioned as first responders as they continued to report to duty on the front lines in these historic, unprecedented circumstances. It is regrettable that the State OIG completed an `investigation? and issued a report without ever giving GDOL an opportunity to respond to any perceived issue. GDOL made a judgment call to protect our staff from hazardous circumstances as best as we could while continuing to deliver critical services. We continue to believe our actions were necessary, appropriate and reasonable to continue to stand up the UI claims process. We stand by that decision. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, given the information reflected above, we reaffirm our finding and will review the status of the finding during our next audit.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF LABOR STATE ENTITY: DEPARTMENT OF LABOR 2021-034 Strengthen Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI312881855A13 (Year: 2018), UI325941955A13 (Year: 2019), UI328341960A13 (Year: 2019), UI340532055A13 (Year: 2020), UI341592055A13 (Year: 2020), UI344912060A13 (Year: 2020), UI347102055A13 (Year: 2020), UI356432155A13 (Year: 2021), UI356992155A13 (Year: 2021), UI359392160A13 (Year: 2021) Questioned Costs: $516,722.00 Description: The Georgia Department of Labor used federal award funds to purchase unallowable employee meals during the COVID-19 pandemic. Background Information: On September 30, 2021, the Georgia Department of Administrative Services (DOAS) issued a report of the results of its limited scope audit of purchasing card (p-card) transactions of the Georgia Department of Labor (DOL) from March 1, 2020 through February 28, 2021. The audit was related to food purchases and was performed to determine compliance with section IX.B.6 (?Food or Meals?) of the Statewide Purchasing Card Policy (P-card Policy) which, incorporates the State Accounting Office?s Group Meal Policy (SAO Group Meal Policy) and Statewide Travel Policy. On October 4, 2021, the Georgia Office of the State Inspector General (OIG) issued a letter addressed to Governor Brian Kemp detailing the results of its review of the expenditures. The letter details the OIG?s findings of whether the DOL?s meal purchases violate the Georgia Constitution and various state administrative rules, specifically the DOAS P-card Policy and the SAO Group Meal Policy, as well as the OIG?s opinion of whether these expenditures constitute general acts of waste. The DOL expended more than $105.9 million in UC and UI COVID-related programs administrative costs during the fiscal year. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. The Uniform Guidance, Section 200.53 - Improper payments states: Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. An improper payment includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper. Additionally, the Uniform Guidance, Section 200.404 ? Reasonable costs states: A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost. Furthermore, provisions included in Title 20 CFR Section 601.6 provide that administrative grant funds be used in ?amounts necessary for the proper and efficient administration of the State unemployment compensation law and employment service program.? Condition: During our engagement, we obtained copies of the reports issued by both the DOAS and the OIG. The DOAS audit determined that from March 1, 2020 to February 28, 2021, the DOL spent $959,175 on p-card food purchases. The DOL spent an additional $153,627 from March 1, 2021, until June 11, 2021, for a total of $1.1 million dollars. This amount was spent on employees who were fed daily for approximately 285 days. The audit details noncompliance with the Statewide P-card Policy, SAO Group Meal Policy, and Statewide Travel Policy. In addition, the audit reports instances of insufficient documentation. The OIG also examined over $1.1 million spent to purchase meals for each of the DOL?s reported 1,026 employees over a nearly 15-month period. The purchases continued without interruption until June 11, 2021, when the DOAS suspended the DOL?s ability to buy meals using a p-card. The OIG inquired into the origin of the funds utilized for the meal purchases. The Governor?s Office of Planning and Budget (OPB) confirmed that approximately $567,000 came from the DOL?s annual state funds appropriation and most of the remaining funds, which totaled approximately $519,000, originated from the federal UI grants provided to the DOL. Our review of the DOL?s accounting records revealed that $516,722 in unallowable meal expenditures were paid with federal award funds during the fiscal year under review. Further, the DOL could not provide the grant award numbers to which the expenditures were charged or any documentation of correspondence with the U.S. Department of Labor to request authorization or make the grantor aware that the DOL planned to use and/or used federal funds for these types of expenditures. Questioned Costs: Questioned costs of $516,722 were identified for unallowable expenditures. The following Assistance Listing Numbers were affected by these questioned costs: 17.225 and 17.225 ? COVID-19. Cause: The DOL management determined the costs were reasonable in the interest of public safety for employees, as well as to meet the critical need to maintain a desirable level of productivity with an unprecedented demand for the DOL services, to use funds to provide lunches on the premises for employee health and welfare during both a pandemic and an unemployment crisis. Effect: The expenditure of federal funds for unallowable purposes resulted in noncompliance with federal regulations and questioned costs. In addition, grant provisions allow the grantor to penalize the DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent the DOL from effectively administering the UI program in the future. The U.S. Department of Labor may require repayment of costs that are determined to be unallowable and the State of Georgia could be responsible for such repayment. Recommendation: The DOL should ensure that all current and future business practices follow the established policies and procedures of the Uniform Guidance, the U.S. Department of Labor, and the State of Georgia. We recommend that the DOL contact the U.S. Department of Labor for the guidance and authorization to use federal funds when the expenditure is deemed uncommon and/or extraordinary. Views of Responsible Officials: We do not concur with this finding. The State Auditor presents language from the Uniform Guidance, Section 200.404 regarding reasonable costs, stating specifically, A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under circumstances prevailing at the time the decision was made to incur the cost. To that statement we offer the following information which must also be considered under these circumstances: ? EUISAA Emergency Grants ($1,000,000,000 to the states) amended Social Security Act, adding subsection (h) to 42 USC Section 1103: o 42 USC 1103(h)(4)- ?Any amount transferred to the account of a State under this subsection may be used by such State only for the administration of its unemployment compensation law, including by taking such steps as may be necessary to ensure adequate resources in periods of high demand.? ? USDOL ETA Website COVID-19 FAQ?s https://www.dol.gov/agencies/eta/coronavirus#adminflex ? ALL Grants ? Administrative Flexibilities Section: o Question: Can grantees repurpose grant funds to offset additional expenses related to COVID-19 such as increased paid time off or overtime for staff? o Answer: (last sentence) ?Grant recipients should not place their staff in danger or a hazardous setting.? The condition statements reference a review of P-card purchases conducted by the state Department of Administrative Services reviewing food purchases made on behalf of GDOL staff during a declared international, national and state emergency. The COVID-19 pandemic emergency created a perfect storm for GDOL and we continue to deal with residual effects of that perfect storm to this day. The event not only caused an epic increase in Unemployment Insurance (UI) claims for benefits due to the expansion of new federal programs but at the same time created a life altering impact to GDOL staff and their families. We must note for the record that our agency was grossly understaffed after years of reduced state and federal appropriations of administrative dollars and no assistance was offered through the legislative appropriation process nor did we receive distribution of adequate CARES act funding for critical staffing and operational needs from the State. While many employees were able to work from the safety of their homes, GDOL had to meet that challenge head on and provide critically needed financial assistance to eligible, suffering fellow Georgians. GDOL had the critical responsibility to serve customers filing claims at a rate and volume never seen in history. GDOL processed about 6 million UI benefit claims, an amount exceeding the sum total of all claims processed in the past ten years combined. More than 23 billion dollars in UI benefits have been paid. This amount exceeds the total amount of benefits paid in the previous 82 years combined. To accomplish this potentially crippling feat, GDOL rehired experienced retirees, reassigned staff from other duties, and used contractors where appropriate. Consistent with the practice of other state labor departments, our employees were considered essential employees and continued to report to the office even as other state agencies and their employees (such as OIG, DOAS and DOAA) allowed their employees to work from the safety of their homes. GDOL initiated efforts to keep our essential office employees safe during this time. For example, after securing approval from the Department of Administrative Services (DOAS) to provide lunches for our employees, GDOL began providing lunch to its workers in order for employees to remain in their offices and continue to sustain the critically required claims process. Providing lunch and asking staff to remain at their desks allowed us to realize more than 230,000 additional work hours to process UI claims and interact with Georgians in desperate need of our services. The increase in labor hours is equivalent to approximately 90 additional full-time, experienced staff with an estimated savings of eight (8) million dollars in administrative costs. GDOL staffing during the period consisted of 1,100 employees, over 60 security guards and more than 400 contractors. We invested an average of one thousand dollars per employee over a 15-month period and were able to achieve and sustain an exceptionally high operational capacity. This translates to $67 per month per employee invested to process six (6) million UI claims and deliver twenty-three (23) billion dollars in UI benefits faster than most states of comparable size in the midst of persistent threats to personal safety, exposure of employee home addresses on social media, property vandalism, and protests. As offered in GDOL?s response to the DOAS report, GDOL did not begin this process before seeking and securing authorization from DOAS to make the purchases using the P-card. GDOL followed DOAS? guidelines entering invoices each business day in the DOAS proprietary TGM statewide system. GDOL complied with SAO per diem guidelines of $7 or $9 for lunches (depending on office location) with limited exceptions that occurred in the initial deployment of the process. Any queries for clarification received from DOAS over the 15 months this occurred were quickly and fully addressed. Wherever possible, GDOL utilized small businesses struggling during the pandemic and the Georgia State University cafeteria. We also note here that the State Accounting Office finally modified its per diem guidelines effective February 1, 2022 to change the lunch per diem to $14 after decades at the abysmally lower rate. We continued to follow emergency Coronavirus mandates and Executive Orders issued by the Governor?s Office which remained in effect in June 2021. We also wanted to reduce the need to make stops on the commute to and from work. Any employee illness could negatively impact the operation. We took the responsibility to actively maintain a safe workplace. Even OIG admits GDOL?s reasons for providing lunches were justifiable before asserting that the justification somehow morphed into `waste? in violation of the ?gratuities? clause upon the approval of the COVID vaccines in March/April 2021. OIG also admitted that agencies have discretion with regards to how administrative assessment monies are spent. The federal dollars came from emergency administrative funds provided to the states by USDOL with broad discretion to states regarding the use of such funds to ensure adequate resources were available during this national historic emergency. This process was thoughtfully considered and undertaken in a genuine effort to reduce unnecessary workplace exposure to COVID and markedly enhanced claim processing productivity. There was no vaccine available during the first 12 months of this activity. When vaccines were introduced, they were limited to certain populations who, for the most part, were not in the workplace processing UI claims. The decision was made to deliver lunches to all of our locations as grocery stores experienced greatly diminished product availability, restaurants closed due to the shrinking workforce, no relief was in sight and no one had any reasonable prediction on how long this international crisis would last. GDOL could not and did not close down its processes and wait for the crisis to pass. That option was never a consideration. We have a responsibility to our fellow Georgians and to our employees. As an agency, we have experienced 382 cases of COVID, twenty-six (26) of those cases resulted in hospitalizations and unfortunately TEN (10) members of our staff paid the ultimate price and lost their lives to the Coronavirus. These ten staff members were parents, grandparents, siblings, friends, neighbors, and community partners. Four of these deaths occurred after the provision of lunches ended on June 10, 2021. These ten staffers were people engaged in the everyday life. We are certain that their surviving loved ones would find the categorization of providing them a delivered meal while they were at their desk working in a pandemic as a waste or abuse to be absolutely abhorrent. In the opinion of these external reviewers, staff at GDOL are undoubtedly dispensable. We strongly disagree that investing in the health and safety of our employees was reckless, grossly negligent, needless, imprudent, wasteful and certainly not unreasonable. The loss of life and staff infections we suffered would likely have been far greater had we not taken the strategic approach to limit employee ingress and egress, provide meals and encourage social distancing in the workplace. Our attempt to protect our invaluable human resources by making the decision to reduce a known risk was neither abusive or unreasonable but an act of genuine compassion, a substantial benefit to the state, and actually more than reasonable given the limited alternatives. Again, this investment was most beneficial as the return yielded hundreds of thousands of additional hours in critically needed, cost-efficient productivity. Such disregard for humankind does little more than contribute to the reasons that so many are leaving the workplace and causes employers in every sector to suffer as a result. GDOL employees were positioned as first responders as they continued to report to duty on the front lines in these historic, unprecedented circumstances. It is regrettable that the State OIG completed an `investigation? and issued a report without ever giving GDOL an opportunity to respond to any perceived issue. GDOL made a judgment call to protect our staff from hazardous circumstances as best as we could while continuing to deliver critical services. We continue to believe our actions were necessary, appropriate and reasonable to continue to stand up the UI claims process. We stand by that decision. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, given the information reflected above, we reaffirm our finding and will review the status of the finding during our next audit.
2021-034 Strengthen Controls over Expenditures Federal Agency: U.S. Department of Labor State Entity: Department of Labor No corrective action warranted. The State Auditor presents language from the Uniform Guidance, Section 200.404 regarding reasonable costs, stating specifically, A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under circumstances prevailing at the time the decision was made to incur the cost. To that statement we offer the following information which must also be considered under these circumstances: ? EUISAA Emergency Grants ($1,000,000,000 to the states) amended Social Security Act, adding subsection (h) to 42 USC Section 1103: o 42 USC 1103(h)(4) - ?Any amount transferred to the account of a State under this subsection may be used by such State only for the administration of its unemployment compensation law, including by taking such steps as may be necessary to ensure adequate resources in periods of high demand.? ? USDOL ETA Website COVID-19 FAQ?s https://www.dol.gov/agencies/eta/coronavirus#adminflex ? ALL Grants ? Administrative Flexibilities Section: o Question: Can grantees repurpose grant funds to offset additional expenses related to COVID-19 such as increased paid time off or overtime for staff? o Answer: (last sentence) ?Grant recipients should not place their staff in danger or a hazardous setting.? The condition statements reference a review of P-card purchases conducted by the state Department of Administrative Services reviewing food purchases made on behalf of GDOL staff during a declared international, national and state emergency. The COVID-19 pandemic emergency created a perfect storm for GDOL and we continue to deal with residual effects of that perfect storm to this day. The event not only caused an epic increase in Unemployment Insurance (UI) claims for benefits due to the expansion of new federal programs but at the same time created a life altering impact to GDOL staff and their families. We must note for the record that our agency was grossly understaffed after years of reduced state and federal appropriations of administrative dollars and no assistance was offered through the legislative appropriation process nor did we receive distribution of adequate CARES act funding for critical staffing and operational needs from the State. While many employees were able to work from the safety of their homes, GDOL had to meet that challenge head on and provide critically needed financial assistance to eligible, suffering fellow Georgians. GDOL had the critical responsibility to serve customers filing claims at a rate and volume never seen in history. GDOL processed about 6 million UI benefit claims, an amount exceeding the sum total of all claims processed in the past ten years combined. More than 23 billion dollars in UI benefits have been paid. This amount exceeds the total amount of benefits paid in the previous 82 years combined. To accomplish this potentially crippling feat, GDOL rehired experienced retirees, reassigned staff from other duties, and used contractors where appropriate. Consistent with the practice of other state labor departments, our employees were considered essential employees and continued to report to the office even as other state agencies and their employees (such as OIG, DOAS and DOAA) allowed their employees to work from the safety of their homes. GDOL initiated efforts to keep our essential office employees safe during this time. For example, after securing approval from the Department of Administrative Services (DOAS) to provide lunches for our employees, GDOL began providing lunch to its workers in order for employees to remain in their offices and continue to sustain the critically required claims process. Providing lunch and asking staff to remain at their desks allowed us to realize more than 230,000 additional work hours to process UI claims and interact with Georgians in desperate need of our services. The increase in labor hours is equivalent to approximately 90 additional full-time, experienced staff with an estimated savings of eight (8) million dollars in administrative costs. GDOL staffing during the period consisted of 1,100 employees, over 60 security guards and more than 400 contractors. We invested an average of one thousand dollars per employee over a 15-month period and were able to achieve and sustain an exceptionally high operational capacity. This translates to $67 per month per employee invested to process six (6) million UI claims and deliver twenty-three (23) billion dollars in UI benefits faster than most states of comparable size in the midst of persistent threats to personal safety, exposure of employee home addresses on social media, property vandalism, and protests. As offered in GDOL?s response to the DOAS report, GDOL did not begin this process before seeking and securing authorization from DOAS to make the purchases using the P-card. GDOL followed DOAS? guidelines entering invoices each business day in the DOAS proprietary TGM statewide system. GDOL complied with SAO per diem guidelines of $7 or $9 for lunches (depending on office location) with limited exceptions that occurred in the initial deployment of the process. Any queries for clarification received from DOAS over the 15 months this occurred were quickly and fully addressed. Wherever possible, GDOL utilized small businesses struggling during the pandemic and the Georgia State University cafeteria. We also note here that the State Accounting Office finally modified its per diem guidelines effective February 1, 2022 to change the lunch per diem to $14 after decades at the abysmally lower rate. We continued to follow emergency Coronavirus mandates and Executive Orders issued by the Governor?s Office which remained in effect in June 2021. We also wanted to reduce the need to make stops on the commute to and from work. Any employee illness could negatively impact the operation. We took the responsibility to actively maintain a safe workplace. Even OIG admits GDOL?s reasons for providing lunches were justifiable before asserting that the justification somehow morphed into `waste? in violation of the ?gratuities? clause upon the approval of the COVID vaccines in March/April 2021. OIG also admitted that agencies have discretion with regards to how administrative assessment monies are spent. The federal dollars came from emergency administrative funds provided to the states by USDOL with broad discretion to states regarding the use of such funds to ensure adequate resources were available during this national historic emergency. This process was thoughtfully considered and undertaken in a genuine effort to reduce unnecessary workplace exposure to COVID and markedly enhanced claim processing productivity. There was no vaccine available during the first 12 months of this activity. When vaccines were introduced, they were limited to certain populations who, for the most part, were not in the workplace processing UI claims. The decision was made to deliver lunches to all of our locations as grocery stores experienced greatly diminished product availability, restaurants closed due to the shrinking workforce, no relief was in sight and no one had any reasonable prediction on how long this international crisis would last. GDOL could not and did not close down its processes and wait for the crisis to pass. That option was never a consideration. We have a responsibility to our fellow Georgians and to our employees. As an agency, we have experienced 382 cases of COVID, twenty-six (26) of those cases resulted in hospitalizations and unfortunately TEN (10) members of our staff paid the ultimate price and lost their lives to the Coronavirus. These ten staff members were parents, grandparents, siblings, friends, neighbors, and community partners. Four of these deaths occurred after the provision of lunches ended on June 10, 2021. These ten staffers were people engaged in the everyday life. We are certain that their surviving loved ones would find the categorization of providing them a delivered meal while they were at their desk working in a pandemic as a waste or abuse to be absolutely abhorrent. In the opinion of these external reviewers, staff at GDOL are undoubtedly dispensable. We strongly disagree that investing in the health and safety of our employees was reckless, grossly negligent, needless, imprudent, wasteful and certainly not unreasonable. The loss of life and staff infections we suffered would likely have been far greater had we not taken the strategic approach to limit employee ingress and egress, provide meals and encourage social distancing in the workplace. Our attempt to protect our invaluable human resources by making the decision to reduce a known risk was neither abusive or unreasonable but an act of genuine compassion, a substantial benefit to the state, and actually more than reasonable given the limited alternatives. Again, this investment was most beneficial as the return yielded hundreds of thousands of additional hours in critically needed, cost-efficient productivity. Such disregard for humankind does little more than contribute to the reasons that so many are leaving the workplace and causes employers in every sector to suffer as a result. GDOL employees were positioned as first responders as they continued to report to duty on the front lines in these historic, unprecedented circumstances. It is regrettable that the State OIG completed an `investigation? and issued a report without ever giving GDOL an opportunity to respond to any perceived issue. GDOL made a judgment call to protect our staff from hazardous circumstances as best as we could while continuing to deliver critical services. We continue to believe our actions were necessary, appropriate and reasonable to continue to stand up the UI claims process. We stand by that decision.
Our audit of the Unemployment Compensation Fund (UCF) included a review of benefit payments related to regular UC, SEB, and CARES Act UI programs. A sample of 85 UI benefit payment transactions processed by the DOL was randomly selected for testing using a non-statistical sampling method. In addition, 159 individually significant UI benefit payment transactions were selected for testing. The following deficiencies were identified for improper payments totaling $69,479: ? Identity verification was not performed appropriately in 29 instances. ? Non-monetary determination was not performed in two instances. ? Documentation of wages was not maintained for 13 PUA claimants. ? Proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. ? One PUA claimant's last day worked was prior to the pandemic; therefore, they were not eligible for PUA. ? One PUA claimant was not unemployed due to COVID; therefore, they were not eligible for PUA but were eligible for the PEUC program. ? One Regular UI claimant was paid the incorrect amount. ? One PUA claimant was paid for a WED prior to the WED the individual stated their employment was affected by COVID. ? Duplicate payments were noted in 13 regular UC transactions. ? Duplicate payments were noted in 12 PUA transactions. ? Payments exceeding the claimant?s weekly benefit amount (WBA) were noted for 133 SEB transactions. ? SEB and PEUC payments were received by 65 claimants for the same WED. ? FPUC payments were paid during a week in which the claimant was ineligible in 24 instances. ? Lost wages assistance (LWA) payments were paid during a week in which the claimant was ineligible in two instances. Additionally, after identifying that 65 claimants received a SEB and PEUC payment for the same WED, auditors reviewed the benefit payment data file for additional exceptions and noted that the DOL made 3,575 PEUC payments totaling $1,024,974 during the same week they also paid a claimant an SEB payment. Furthermore, while auditors requested that the DOL provide documentation and/or explanations to remediate these potential errors, no such information was provided. Questioned Costs: Upon testing a sample of $20,839 in UC program payments, known questioned costs of $4,686 were identified. Using the population of UC payments sampled, which totaled $7,160,122,119, we project likely questioned costs to be approximately $1,604,545,100. In addition, known questioned costs were also identified as noted below: ? $57,593 for improper payments associated with individually significant benefit payments tested; ? $7,200 for improper FPUC, LWA, and Extra Payment PEUC payment amounts associated with the sample of benefit payments selected for testing; and ? $1,006,350 were identified for additional improper PEUC payments made during weeks in which a claimant was also paid SEB, beyond the $18,624 amount identified in other testing above. The known questioned costs identified for improper payments totaled $1,075,829. Cause: Due to the unprecedented volume of UC claims related to the COVID-19 pandemic and the short time in which to implement the CARES Act programs with limited guidance, existing controls over claims processing were modified and/or eliminated. In addition, the DOL?s processes for lowering an individual?s WBA to the minimum amount and/or stopping payments for individuals who did not submit the required documentation by the deadline is completely manual and time consuming. Therefore, the DOL dedicated its resources to higher priorities to support its mission-essential functions due to the COVID-19 pandemic. Furthermore, various benefit payment system errors caused the duplication of payments and the payment of benefits from the incorrect program during the period under review. Effect: Without effective controls, the DOL increases its risk of providing benefits to ineligible claimants and not detecting improper payments. The deficiencies in eligibility determinations also resulted in noncompliance with federal regulations and questioned costs. While funds for benefit payments are not provided to states through grant awards, states are awarded funds to administer these programs. Grant provisions allow the grantor to penalize the DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits in the future. Recommendation: The DOL management should develop and implement internal controls over eligibility and claims processing to ensure procedures are consistently enforced and operating effectively. Management should also provide training on procedures for processing unemployment claims for new programs created by the CARES Act. Strong monitoring controls should be implemented, as well, to ensure that the DOL achieves its objectives in complying with the eligibility requirements for the various UC programs. Additionally, the DOL management should develop analytical procedures and queries to identify duplicate payments and payments that are more than the claimant?s WBA. Additionally, analytical procedures and queries to identify payments that have been made to claimants without identify verification and non-monetary and monetary determinations should be developed. Furthermore, the DOL management should develop IT controls to stop the release of payment until identity and eligibility requirements are substantiated and verified. The DOL management should also develop and implement procedures to stop or reduce payments when individuals do not provide required documentation. Views of Responsible Officials: We do not concur with this finding. The Georgia Department of Labor (GDOL) appreciates the opportunity to respond to the Georgia State FY 2021 Audit report. The pandemic resulted in an unprecedented volume of unemployment insurance (UI) claims related to the CARES Act. This warranted immediate adjustment to system and business processes with limited technical and business resources. Programming demands to implement federal pandemic UI programs on an already stressed benefits system caused an overwhelming burden to make payments quickly. The following information addresses the areas in which GDOL disagrees with some findings and areas of concern by first providing the auditor?s findings followed by Georgia?s response. FA-440-21-01 - The Georgia Department of Labor did not have effective internal controls in place to ensure unemployment benefit payments were made correctly and only to eligible claimants. Auditors findings: (1) Identity verification was not performed appropriately in 29 instances. GDOL Response: The Georgia Department of Labor disagrees with these findings as it relates to identity verification. The auditors did not identify the type of identity verification procedures not performed or any identity verification procedures that GDOL was required to perform. There was not a mandatory requirement to complete identity verification at the time most of these applications were submitted, which is outside the scope of the audit. At the start of the pandemic, the identity proofing processes available were Social Security Administration (SSA) verification, Department of Driver Services (DDS) crossmatch and for non-citizens, Systematic Alien Verification for Entitlement (SAVE). As applicable, these processes were performed on all initial regular and employer-filed claims (EFC), which includes the 29 instances. (2) Non-monetary determination was not performed in two instances. GDOL Response: Instance 1: The indicator used to hold payments while a lack of work separation is pending eligibility was resolved on 3/27/20. An allowable determination was released 4/29/22, and all payable weeks have been processed. There was no detriment to the claimant as they were determined eligible, nor was there any monetary loss to the State. Instance 2: Employer-filed claim converted to total claim by employer on 5/19/20. An allowable determination was released 1/12/22, and all payable weeks have been processed. There was no detriment to the claimant as they were determined eligible, nor was there any monetary loss to the State. (3) Documentation of wages was not maintained for 13 PUA claimants. GDOL Response: The GDOL disagrees with the findings related to documentation of wages was not maintained for 13 PUA claimants. For individuals who established Pandemic Unemployment Assistance (PUA) entitlement at a minimum weekly benefit amount, these claimants were instructed to submit their proof of wages by email. Under the CARES Act, if claimants did not submit proof, federal requirements only allowed for payment of the minimum weekly benefit amount and no disqualification of benefits. To date, no proof has been provided by the claimants cited. Claims were originally established and remain established for the minimum weekly benefit amount. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. The disqualification could not be applied retroactively to any benefit weeks paid under CARES. For individuals who established PUA entitlement with a weekly benefit amount greater than the minimum, PUA claims were initially established based on wages entered by the claimant and/or wages reported by the employer. CARES Act only required proof of wages to be submitted. To date, no proof has been provided by the claimants. Claims have been reduced to the minimum weekly benefit amount and overpayments established. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. The disqualification could not be applied retroactively to any benefit weeks paid under CARES. (4) Proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. GDOL Response: The GDOL disagrees with the findings related to proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. Under the CARES Act, claimants did not have to provide proof of employment or self-employment. It was not until CAA was enacted in December 27, 2020 that such proof was required. The disqualification could not be applied retroactively. For individuals who established Pandemic Unemployment Assistance (PUA) entitlement at a minimum weekly benefit amount, these claimants were instructed to submit their proof of wages by email. Under the CARES Act, if claimants did not submit proof, federal requirements only allowed for payment of the minimum weekly benefit amount and no disqualification of benefits. To date, no proof has been provided by the claimants cited. Claims were originally established and remain established for the minimum weekly benefit amount. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. For individuals who established PUA entitlement with a weekly benefit amount greater than the minimum, PUA claims were initially established based on wages entered by the claimant and/or wages reported by the employer. CARES Act only required proof of wages to be submitted. To date, no proof has been provided by the claimants. Claims have been reduced to the minimum weekly benefit amount and overpayments established. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. (5) One PUA claimant?s last day worked was prior to the pandemic; therefore, they were not eligible for PUA. GDOL Response: Proof of self-employment submitted but unclear whether claimant was attached to employment when COVID started. The claim is being assigned to an examiner for further review. If it is determined the individual?s last date worked was prior to the pandemic, an overpayment will be established. (6) One PUA claimant was not unemployed due to COVID; therefore, they were not eligible for PUA but were eligible for the PEUC program. GDOL Response: This same claim was a finding last year and addressed during last year?s audit. At that time, claim was redetermined to not be eligible and overpayment was established. (7) One Regular UI claimant was paid the incorrect amount. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (8) One PUA claimant was paid for a WED prior to the WED the individual stated their employment was affected by COVID. GDOL Response: UI benefit year beginning date is 3/15/20. Claimant listed affected by COVID beginning 3/19/20. Claimant was paid for week ending 3/14/20. Overpayment has been established. (9) Duplicate payments were noted in 13 regular UC transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (10) Duplicate payments were noted in 12 PUA transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (11) Payments exceeding the claimant?s weekly benefit amount (WBA) were noted for 133 SEB transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. Overpayments have since been established for the excessive amount paid for all claimants. The system was corrected on April 22, 2021. (12) SEB and PEUC payments were received by 65 claimants for the same WED. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. The system was corrected on February 18, 2021. Establishment of overpayments is in progress. (13) FPUC payments were paid during a week in which the claimant was ineligible in 24 instances. GDOL Response: GDOL disagrees with the findings related to FPUC payments were paid during a week in which the claimant was ineligible in 24 instances. Upon reviewing a sample of the cases submitted by the auditors, the audit report is unfounded. Many of the claimants provided were paid as result of employer-filed claims and/or there is no evidence of disqualifications precluding the eligibility to receive FPUC payments. (14) Lost wages assistance (LWA) payments were paid during a week in which the claimant was ineligible in two instances. GDOL Response: GDOL disagrees with the findings related to Lost wages assistance (LWA) payments were paid during a week in which the claimant was ineligible in two instances. Upon reviewing the cases submitted by the auditors, the audit report is unfounded. One claimant was paid as result of employer-filed claims and the other showed no evidence of disqualification precluding the eligibility to receive LWA payments. Summary The information above is provided for your consideration in dispelling some of the audit findings. GDOL took immediate action to establish the federal UI programs and comply with federal guidance and regulations. As system deficiencies were identified, changes were made as quickly as possible to mitigate risks of improper payments. Beginning July 2020, all automation of PUA claim review was suspended and each claim was manually reviewed by staff before a determination was released. GDOL established task forces to develop and implement strategies to address the ramped fraud attempts to bypass system and procedural safeguards. Training on the CARES Act has been provided since implementation of the programs. Resource materials, memorandums and desk-aids are released, as appropriate with program changes and process enhancements. Additionally, when new applications are developed, processing changes made, and/or new staff are hired or moved into new roles, training is provided on the subject matter, as appropriate. Prioritizing system changes was challenging with the time constraints, necessity to build a program based on an establish program that operated manually in our state and the demands of all other federal UI programs but GDOL made every attempt to maximize our system capacity to accommodate the guidelines of each program requirements. Georgia greatly appreciates your time and consideration of our response to the findings and welcome you to contact us if you have any questions. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, as noted in the finding details above, auditors requested on multiple occasions that the DOL provide documentation and/or explanations for each claimant associated with the potential errors reflected in the ?Condition,? and this information was not provided and has not yet been provided to auditors. We reaffirm our finding and will review the status of the finding during our next audit.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF LABOR (continued) STATE ENTITY: DEPARTMENT OF LABOR (continued) 2021-035 Improve Controls over Eligibility Determinations Compliance Requirement: Eligibility Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI312881855A13 (Year: 2018), UI325941955A13 (Year: 2019), UI328341960A13 (Year: 2019), UI340532055A13 (Year: 2020), UI341592055A13 (Year: 2020), UI344912060A13 (Year: 2020), UI347102055A13 (Year: 2020), UI356432155A13 (Year: 2021), UI356992155A13 (Year: 2021), UI359392160A13 (Year: 2021) Questioned Costs: $1,075,829.00 Repeat of Prior Year Finding: 2020-036 Description: The Georgia Department of Labor did not have effective internal controls in place to ensure unemployment benefit payments were made correctly and only to eligible claimants. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional UI provisions. Title II, Subtitle A of the CARES Act, authorizes the following temporary UI programs: ? Federal Pandemic Unemployment Compensation (FPUC) ? The FPUC program provides eligible individuals with $600 per week in addition to the weekly benefit amount they receive from certain other UC programs. ? Pandemic Emergency Unemployment Compensation (PEUC) ? The PEUC program provides up to 13 weeks of benefits to individuals who have exhausted all rights to regular compensation under State law or Federal law with respect to a benefit year that ended on or after July 1, 2019, have no rights to regular compensation with respect to a week under any other State or Federal UC law, are not receiving compensation with respect to such week under the UC law of Canada, and are able to work, available to work, and actively seeking work. ? Pandemic Unemployment Assistance (PUA) ? The PUA program provides up to 39 weeks of benefits to those individuals who are not eligible for regular UC or extended benefits under State or Federal law or PEUC, including those who have exhausted all rights to such benefits. In addition, the State Extended Benefits (SEB) program, which is an extension of UC benefits, becomes available for payment when the State?s 13-week insured unemployment rate (IUR) exceeds 5% and pays claimants up to an additional 13 weeks of compensation. Under the SEB program, the State is required to provide 50% of the amounts paid to the majority of eligible SEB claimants, which are those not covered by Federal law or special provisions of State law. However, under the CARES Act, the U.S. Department of Labor will reimburse the State at 100% of eligible costs for the SEB program. The State of Georgia became eligible to pay SEB May 10, 2020. However, the first payable weekending date (WED) was on July 4, 2020, as the first payable WED of PEUC was April 4, 2020. Further, the last payable WED for SEB was February 6, 2021. The Georgia Department of Labor (DOL) paid out more than $2.5 billion and $9.2 billion in UC and CARES Act benefits, respectively, to over 1.1 million individuals for the fiscal year under review. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. The Uniform Guidance, Section 200.53 - Improper payments states: Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. An improper payment includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper. Additionally, provisions included in Title 20 CFR Section 604.3(a) state: A State may pay UC only to an individual who is able to work and available for work for the week for which UC is claimed. Furthermore, Title II, Subtitle A of the CARES Act provides specific eligibility guidance for the FPUC, PEUC, and PUA programs. Condition: Our audit of the Unemployment Compensation Fund (UCF) included a review of benefit payments related to regular UC, SEB, and CARES Act UI programs. A sample of 85 UI benefit payment transactions processed by the DOL was randomly selected for testing using a non-statistical sampling method. In addition, 159 individually significant UI benefit payment transactions were selected for testing. The following deficiencies were identified for improper payments totaling $69,479: ? Identity verification was not performed appropriately in 29 instances. ? Non-monetary determination was not performed in two instances. ? Documentation of wages was not maintained for 13 PUA claimants. ? Proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. ? One PUA claimant's last day worked was prior to the pandemic; therefore, they were not eligible for PUA. ? One PUA claimant was not unemployed due to COVID; therefore, they were not eligible for PUA but were eligible for the PEUC program. ? One Regular UI claimant was paid the incorrect amount. ? One PUA claimant was paid for a WED prior to the WED the individual stated their employment was affected by COVID. ? Duplicate payments were noted in 13 regular UC transactions. ? Duplicate payments were noted in 12 PUA transactions. ? Payments exceeding the claimant?s weekly benefit amount (WBA) were noted for 133 SEB transactions. ? SEB and PEUC payments were received by 65 claimants for the same WED. ? FPUC payments were paid during a week in which the claimant was ineligible in 24 instances. ? Lost wages assistance (LWA) payments were paid during a week in which the claimant was ineligible in two instances. Additionally, after identifying that 65 claimants received a SEB and PEUC payment for the same WED, auditors reviewed the benefit payment data file for additional exceptions and noted that the DOL made 3,575 PEUC payments totaling $1,024,974 during the same week they also paid a claimant an SEB payment. Furthermore, while auditors requested that the DOL provide documentation and/or explanations to remediate these potential errors, no such information was provided. Questioned Costs: Upon testing a sample of $20,839 in UC program payments, known questioned costs of $4,686 were identified. Using the population of UC payments sampled, which totaled $7,160,122,119, we project likely questioned costs to be approximately $1,604,545,100. In addition, known questioned costs were also identified as noted below: ? $57,593 for improper payments associated with individually significant benefit payments tested; ? $7,200 for improper FPUC, LWA, and Extra Payment PEUC payment amounts associated with the sample of benefit payments selected for testing; and ? $1,006,350 were identified for additional improper PEUC payments made during weeks in which a claimant was also paid SEB, beyond the $18,624 amount identified in other testing above. The known questioned costs identified for improper payments totaled $1,075,829. Cause: Due to the unprecedented volume of UC claims related to the COVID-19 pandemic and the short time in which to implement the CARES Act programs with limited guidance, existing controls over claims processing were modified and/or eliminated. In addition, the DOL?s processes for lowering an individual?s WBA to the minimum amount and/or stopping payments for individuals who did not submit the required documentation by the deadline is completely manual and time consuming. Therefore, the DOL dedicated its resources to higher priorities to support its mission-essential functions due to the COVID-19 pandemic. Furthermore, various benefit payment system errors caused the duplication of payments and the payment of benefits from the incorrect program during the period under review. Effect: Without effective controls, the DOL increases its risk of providing benefits to ineligible claimants and not detecting improper payments. The deficiencies in eligibility determinations also resulted in noncompliance with federal regulations and questioned costs. While funds for benefit payments are not provided to states through grant awards, states are awarded funds to administer these programs. Grant provisions allow the grantor to penalize the DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits in the future. Recommendation: The DOL management should develop and implement internal controls over eligibility and claims processing to ensure procedures are consistently enforced and operating effectively. Management should also provide training on procedures for processing unemployment claims for new programs created by the CARES Act. Strong monitoring controls should be implemented, as well, to ensure that the DOL achieves its objectives in complying with the eligibility requirements for the various UC programs. Additionally, the DOL management should develop analytical procedures and queries to identify duplicate payments and payments that are more than the claimant?s WBA. Additionally, analytical procedures and queries to identify payments that have been made to claimants without identify verification and non-monetary and monetary determinations should be developed. Furthermore, the DOL management should develop IT controls to stop the release of payment until identity and eligibility requirements are substantiated and verified. The DOL management should also develop and implement procedures to stop or reduce payments when individuals do not provide required documentation. Views of Responsible Officials: We do not concur with this finding. The Georgia Department of Labor (GDOL) appreciates the opportunity to respond to the Georgia State FY 2021 Audit report. The pandemic resulted in an unprecedented volume of unemployment insurance (UI) claims related to the CARES Act. This warranted immediate adjustment to system and business processes with limited technical and business resources. Programming demands to implement federal pandemic UI programs on an already stressed benefits system caused an overwhelming burden to make payments quickly. The following information addresses the areas in which GDOL disagrees with some findings and areas of concern by first providing the auditor?s findings followed by Georgia?s response. FA-440-21-01 - The Georgia Department of Labor did not have effective internal controls in place to ensure unemployment benefit payments were made correctly and only to eligible claimants. Auditors findings: (1) Identity verification was not performed appropriately in 29 instances. GDOL Response: The Georgia Department of Labor disagrees with these findings as it relates to identity verification. The auditors did not identify the type of identity verification procedures not performed or any identity verification procedures that GDOL was required to perform. There was not a mandatory requirement to complete identity verification at the time most of these applications were submitted, which is outside the scope of the audit. At the start of the pandemic, the identity proofing processes available were Social Security Administration (SSA) verification, Department of Driver Services (DDS) crossmatch and for non-citizens, Systematic Alien Verification for Entitlement (SAVE). As applicable, these processes were performed on all initial regular and employer-filed claims (EFC), which includes the 29 instances. (2) Non-monetary determination was not performed in two instances. GDOL Response: Instance 1: The indicator used to hold payments while a lack of work separation is pending eligibility was resolved on 3/27/20. An allowable determination was released 4/29/22, and all payable weeks have been processed. There was no detriment to the claimant as they were determined eligible, nor was there any monetary loss to the State. Instance 2: Employer-filed claim converted to total claim by employer on 5/19/20. An allowable determination was released 1/12/22, and all payable weeks have been processed. There was no detriment to the claimant as they were determined eligible, nor was there any monetary loss to the State. (3) Documentation of wages was not maintained for 13 PUA claimants. GDOL Response: The GDOL disagrees with the findings related to documentation of wages was not maintained for 13 PUA claimants. For individuals who established Pandemic Unemployment Assistance (PUA) entitlement at a minimum weekly benefit amount, these claimants were instructed to submit their proof of wages by email. Under the CARES Act, if claimants did not submit proof, federal requirements only allowed for payment of the minimum weekly benefit amount and no disqualification of benefits. To date, no proof has been provided by the claimants cited. Claims were originally established and remain established for the minimum weekly benefit amount. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. The disqualification could not be applied retroactively to any benefit weeks paid under CARES. For individuals who established PUA entitlement with a weekly benefit amount greater than the minimum, PUA claims were initially established based on wages entered by the claimant and/or wages reported by the employer. CARES Act only required proof of wages to be submitted. To date, no proof has been provided by the claimants. Claims have been reduced to the minimum weekly benefit amount and overpayments established. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. The disqualification could not be applied retroactively to any benefit weeks paid under CARES. (4) Proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. GDOL Response: The GDOL disagrees with the findings related to proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. Under the CARES Act, claimants did not have to provide proof of employment or self-employment. It was not until CAA was enacted in December 27, 2020 that such proof was required. The disqualification could not be applied retroactively. For individuals who established Pandemic Unemployment Assistance (PUA) entitlement at a minimum weekly benefit amount, these claimants were instructed to submit their proof of wages by email. Under the CARES Act, if claimants did not submit proof, federal requirements only allowed for payment of the minimum weekly benefit amount and no disqualification of benefits. To date, no proof has been provided by the claimants cited. Claims were originally established and remain established for the minimum weekly benefit amount. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. For individuals who established PUA entitlement with a weekly benefit amount greater than the minimum, PUA claims were initially established based on wages entered by the claimant and/or wages reported by the employer. CARES Act only required proof of wages to be submitted. To date, no proof has been provided by the claimants. Claims have been reduced to the minimum weekly benefit amount and overpayments established. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. (5) One PUA claimant?s last day worked was prior to the pandemic; therefore, they were not eligible for PUA. GDOL Response: Proof of self-employment submitted but unclear whether claimant was attached to employment when COVID started. The claim is being assigned to an examiner for further review. If it is determined the individual?s last date worked was prior to the pandemic, an overpayment will be established. (6) One PUA claimant was not unemployed due to COVID; therefore, they were not eligible for PUA but were eligible for the PEUC program. GDOL Response: This same claim was a finding last year and addressed during last year?s audit. At that time, claim was redetermined to not be eligible and overpayment was established. (7) One Regular UI claimant was paid the incorrect amount. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (8) One PUA claimant was paid for a WED prior to the WED the individual stated their employment was affected by COVID. GDOL Response: UI benefit year beginning date is 3/15/20. Claimant listed affected by COVID beginning 3/19/20. Claimant was paid for week ending 3/14/20. Overpayment has been established. (9) Duplicate payments were noted in 13 regular UC transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (10) Duplicate payments were noted in 12 PUA transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (11) Payments exceeding the claimant?s weekly benefit amount (WBA) were noted for 133 SEB transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. Overpayments have since been established for the excessive amount paid for all claimants. The system was corrected on April 22, 2021. (12) SEB and PEUC payments were received by 65 claimants for the same WED. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. The system was corrected on February 18, 2021. Establishment of overpayments is in progress. (13) FPUC payments were paid during a week in which the claimant was ineligible in 24 instances. GDOL Response: GDOL disagrees with the findings related to FPUC payments were paid during a week in which the claimant was ineligible in 24 instances. Upon reviewing a sample of the cases submitted by the auditors, the audit report is unfounded. Many of the claimants provided were paid as result of employer-filed claims and/or there is no evidence of disqualifications precluding the eligibility to receive FPUC payments. (14) Lost wages assistance (LWA) payments were paid during a week in which the claimant was ineligible in two instances. GDOL Response: GDOL disagrees with the findings related to Lost wages assistance (LWA) payments were paid during a week in which the claimant was ineligible in two instances. Upon reviewing the cases submitted by the auditors, the audit report is unfounded. One claimant was paid as result of employer-filed claims and the other showed no evidence of disqualification precluding the eligibility to receive LWA payments. Summary The information above is provided for your consideration in dispelling some of the audit findings. GDOL took immediate action to establish the federal UI programs and comply with federal guidance and regulations. As system deficiencies were identified, changes were made as quickly as possible to mitigate risks of improper payments. Beginning July 2020, all automation of PUA claim review was suspended and each claim was manually reviewed by staff before a determination was released. GDOL established task forces to develop and implement strategies to address the ramped fraud attempts to bypass system and procedural safeguards. Training on the CARES Act has been provided since implementation of the programs. Resource materials, memorandums and desk-aids are released, as appropriate with program changes and process enhancements. Additionally, when new applications are developed, processing changes made, and/or new staff are hired or moved into new roles, training is provided on the subject matter, as appropriate. Prioritizing system changes was challenging with the time constraints, necessity to build a program based on an establish program that operated manually in our state and the demands of all other federal UI programs but GDOL made every attempt to maximize our system capacity to accommodate the guidelines of each program requirements. Georgia greatly appreciates your time and consideration of our response to the findings and welcome you to contact us if you have any questions. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, as noted in the finding details above, auditors requested on multiple occasions that the DOL provide documentation and/or explanations for each claimant associated with the potential errors reflected in the ?Condition,? and this information was not provided and has not yet been provided to auditors. We reaffirm our finding and will review the status of the finding during our next audit.
2021-035 Improve Controls over Eligibility Determinations Federal Agency: U.S. Department of Labor State Entity: Department of Labor The Georgia Department of Labor (GDOL) appreciates the opportunity to respond to the Georgia State FY 2021 Audit report. The pandemic resulted in an unprecedented volume of unemployment insurance (UI) claims related to the CARES Act. This warranted immediate adjustment to system and business processes with limited technical and business resources. Programming demands to implement federal pandemic UI programs on an already stressed benefits system caused an overwhelming burden to make payments quickly. The following information addresses the areas in which GDOL disagrees with some findings and areas of concern by first providing the auditor?s findings followed by Georgia?s response. The Georgia Department of Labor did not have effective internal controls in place to ensure unemployment benefit payments were made correctly and only to eligible claimants. Auditors findings: (1) Identity verification was not performed appropriately in 29 instances. GDOL Response: The Georgia Department of Labor disagrees with these findings as it relates to identity verification. The auditors did not identify the type of identity verification procedures not performed or any identity verification procedures that GDOL was required to perform. There was not a mandatory requirement to complete identity verification at the time most of these applications were submitted, which is outside the scope of the audit. At the start of the pandemic, the identity proofing processes available were Social Security Administration (SSA) verification, Department of Driver Services (DDS) crossmatch and for non-citizens, Systematic Alien Verification for Entitlement (SAVE). As applicable, these processes were performed on all initial regular and employer-filed claims (EFC), which includes the 29 instances. (2) Non-monetary determination was not performed in two instances. GDOL Response: Instance 1: The indicator used to hold payments while a lack of work separation is pending eligibility was resolved on 3/27/20. An allowable determination was released 4/29/22, and all payable weeks have been processed. There was no detriment to the claimant as they were determined eligible, nor was there any monetary loss to the State. Instance 2: Employer-filed claim converted to total claim by employer on 5/19/20. An allowable determination was released 1/12/22, and all payable weeks have been processed. There was no detriment to the claimant as they were determined eligible, nor was there any monetary loss to the State. (3) Documentation of wages was not maintained for 13 Pandemic Unemployment Assistance (PUA) claimants. GDOL Response: The GDOL disagrees with the findings related to documentation of wages was not maintained for 13 PUA claimants. For individuals who established PUA entitlement at a minimum weekly benefit amount, these claimants were instructed to submit their proof of wages by email. Under the CARES Act, if claimants did not submit proof, federal requirements only allowed for payment of the minimum weekly benefit amount and no disqualification of benefits. To date, no proof has been provided by the claimants cited. Claims were originally established and remain established for the minimum weekly benefit amount. In accordance with Continued Assistance Act (CAA) rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. The disqualification could not be applied retroactively to any benefit weeks paid under CARES. For individuals who established PUA entitlement with a weekly benefit amount greater than the minimum, PUA claims were initially established based on wages entered by the claimant and/or wages reported by the employer. CARES Act only required proof of wages to be submitted. To date, no proof has been provided by the claimants. Claims have been reduced to the minimum weekly benefit amount and overpayments established. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. The disqualification could not be applied retroactively to any benefit weeks paid under CARES. (4) Proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. GDOL Response: The GDOL disagrees with the findings related to proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by four PUA claimants. Under the CARES Act, claimants did not have to provide proof of employment or self-employment. It was not until CAA was enacted in December 27, 2020 that such proof was required. The disqualification could not be applied retroactively. For individuals who established PUA entitlement at a minimum weekly benefit amount, these claimants were instructed to submit their proof of wages by email. Under the CARES Act, if claimants did not submit proof, federal requirements only allowed for payment of the minimum weekly benefit amount and no disqualification of benefits. To date, no proof has been provided by the claimants cited. Claims were originally established and remain established for the minimum weekly benefit amount. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. For individuals who established PUA entitlement with a weekly benefit amount greater than the minimum, PUA claims were initially established based on wages entered by the claimant and/or wages reported by the employer. CARES Act only required proof of wages to be submitted. To date, no proof has been provided by the claimants. Claims have been reduced to the minimum weekly benefit amount and overpayments established. In accordance with CAA rules, the claimants were notified to provide proof of employment and wages for weeks paid on or after 12/27/20 and no such proof has been provided. Claimants have been disqualified effective 12/27/20 and overpayments established. (5) One PUA claimant?s last day worked was prior to the pandemic; therefore, they were not eligible for PUA. GDOL Response: Proof of self-employment submitted but unclear whether claimant was attached to employment when COVID started. The claim is being assigned to an examiner for further review. If it is determined the individual?s last date worked was prior to the pandemic, an overpayment will be established. (6) One PUA claimant was not unemployed due to COVID; therefore, they were not eligible for PUA but were eligible for the Pandemic Emergency Unemployment Compensation (PEUC) program. GDOL Response: This same claim was a finding last year and addressed during last year?s audit. At that time, claim was redetermined to not be eligible and overpayment was established. (7) One Regular UI claimant was paid the incorrect amount. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (8) One PUA claimant was paid for a week ending date (WED) prior to the WED the individual stated their employment was affected by COVID. GDOL Response: UI benefit year beginning date is 3/15/20. Claimant listed affected by COVID beginning 3/19/20. Claimant was paid for week ending 3/14/20. Overpayment has been established. (9) Duplicate payments were noted in 13 regular UC transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (10) Duplicate payments were noted in 12 PUA transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. An overpayment has since been established. (11) Payments exceeding the claimant?s weekly benefit amount (WBA) were noted for 133 State Extended Benefits (SEB) transactions. GDOL Response: The issue was caused by system error. A unique confluence of circumstances (i.e., an avalanche of unemployment claims precipitated by a pandemic, implementation of multiple new programs, and public and political pressure to implement new programs rapidly) hindered GDOL?s ability to test and implement system changes to the extent desired or possible under normal circumstances. Overpayments have since been established for the excessive amount paid for all claimants. The system was corrected on April 22, 2021. See issued report for more details.
2020-036
Upon review of the procedures that the DOL established to process partial claims submitted by employers, deficiencies were noted. The DOL did not require employees to self-certify that they were able to work, available for work, and actively seeking work each week they received benefits. Furthermore, the claimant was unable to self-report additional wages and income the employee may have received from sources other than the employer that initially filed the claim. While auditors were unable to determine the total dollar amount of improper payments, the following dollar amounts of benefit payments were submitted and certified by the employer for 459,731 claimants and were affected by these deficiencies: ? UC $894,456,342 ? SEB $26,892,169 ? FPUC $1,141,827,795 ? PEUC $353,342,053 ? LWA $223,605,300 Moreover, the Georgia Department of Audits and Accounts (DOAA) is aware of an instance in which a part-time employer submitted a claim on-behalf of one of the DOAA?s own employees. This part-time employer did not notify the employee that they were submitting a claim on their behalf and did not obtain the employee?s additional wages and income. The DOL processed the employer-submitted claim and began paying the employee benefits though the employee was ineligible for such payments. In addition, our audit of the Unemployment Compensation Fund (UCF) included a review of benefit payments related to regular UC, State Extended Benefits (SEB), and CARES Act UI programs. Upon testing 244 benefit payment transactions processed by the DOL, it was noted that identity verification documentation was not maintained on-file for 23 employer-filed claims. Questioned Costs: Though likely questioned costs may exist, these amounts are unknown as sufficient data to analyze benefit payment transactions associated with these employer-filed claims was not available. The following Assistance Listing Numbers would be affected if questioned costs did exist: 17.225 and 17.225 ? COVID-19. Cause: The DOL management implemented a flawed employer-filed claim process that did not allow for the monitoring of the employees? ability to work and wage verification requirements. Effect: These deficiencies resulted in noncompliance with federal regulations and the Uniform Guidance. Due to lack of controls over employer-filed claims, specifically the inability for claimants to self-certify, it is likely that claimants were paid benefits that they were not eligible to receive. Because eligibility for UC benefits is based on claimants demonstrating that they meet certain eligibility requirements on a weekly basis, the suspension of the requirement for claimants to certify eligibility on a weekly basis did not allow the DOL to determine whether continuing claimants remained eligible for benefits. The State?s failure to administer its UI program in conformity and substantial compliance with federal law can result in loss of the State?s certification and loss of its administrative grant to operate the UC program and/or its employers? tax credits under Federal Unemployment Tax Act (FUTA). Recommendation: We recommend that the DOL develop a process to notify an employee when an employer-filed claim is submitted and to require the employee to create an account with the DOL, verify information, and self-certify employment status for the week being claimed. We also recommend that the DOL develop controls to prevent the release of payment when identity and eligibility requirements have not been substantiated and verified. In addition, we recommend that the DOL develop analytical procedures and queries to identify payments that have been made to claimants without identity verification and/or were otherwise ineligible to receive such payments. Views of Responsible Officials: The Georgia Department of Labor concurs in part and submits the following: The Employer Filed (Partial) Claims (EFC) program originated in the late 1960?s and was designed to allow employers with short term, temporary periods of lack of work for their employees to retain their workforce when work resumes. This is a program that many large manufacturers in Georgia rely on when they have temporary plant shutdowns and have for decades. When GDOL has attempted in the past to limit this program, we have met strong resistance from Georgia?s manufacturers. This program optimizes our ability to process and pay mass numbers of claims more quickly, such as what occurred at the beginning of the pandemic. EFCs may be filed by an employer with respect to any complete pay-period week during which an otherwise full-time employee works less than full-time, due to lack of work only, and earns an amount not exceeding his/her unemployment insurance weekly benefit amount. Such claims shall not be submitted or allowed for vacation days regardless of whether such vacation days were requested by the employee or established by the employer. Effective March 19, 2020, a temporary, Emergency Rule 300-2-4-05(1), containing Rule 300-2-4-.09(1) was signed which required employers to electronically submit EFCs on behalf of their employees whenever it is necessary to temporarily reduce work hours or there was no work available for a short period of time. Employers were allowed to file such claims for full and part time employees whose earnings had been reduced. In July 2020, the Rule was sunset and employers were no longer required to file EFCs. EFCs may be filed online by single entry or upload or paper. An employer may submit EFCs for regular state unemployment insurance programs including available extended benefits programs with the same eligibility requirements as regular UI, such as Pandemic Emergency Unemployment Compensation (PEUC) and State Extended Benefits (SEB), given all regular UI entitlement is exhausted. By electing to submit EFCs on behalf of the individuals, the employer is responsible for attesting to the employment status and weekly earnings of the individual for the EFC submitted. An affidavit certifying that the employer has obtained earnings from other employment as well as other requirements must be completed before EFCs can be entered or uploaded. Individuals for which EFCs are submitted are considered to be still attached to the employer and are exempt from the requirement to register for employment services per Georgia Employment Security Law Rules 300-2-4-.02. Such individuals are not required to be nor certify on a weekly basis to be able, available and actively seeking work. Summary Effective December 6, 2021, the EFC process was revised to require individuals (employees) to complete an EFC profile to include a real-time identity verification before payments can be made. Employers are responsible for submitting the request for the payment to certify to the individual?s employment status but the individuals must certify their identity and personal information for the claim to be processed. Employees are notified when a claim is filed on their behalf and provided instructions for their portion of completing the EFC process. The MyUI dashboard provides all the EFC correspondence sent to the individual as well as a status of the profile set up and identify verification. GDOL has no plans to stop utilizing the EFC program as it is an effective and popular program among employers with a successful 60-year track record. GDOL greatly appreciates the feedback and recommendations and will consider this information in future endeavors to modernize and update system and business processes. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, as noted in the finding details above, the DOAA has not suggested that the DOL discontinue the use of the employer-filed claims process but recommended that employee verification procedures be added to the process. Moreover, it appears that the DOL implemented these recommended employee verification processes after the audit period concluded. We reaffirm our finding and will review the status of the finding during our next audit.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF LABOR (continued) STATE ENTITY: DEPARTMENT OF LABOR (continued) 2021-036 Improve Controls over Employer Filed Claims Compliance Requirement: Eligibility Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI312881855A13 (Year: 2018), UI325941955A13 (Year: 2019), UI328341960A13 (Year: 2019), UI340532055A13 (Year: 2020), UI341592055A13 (Year: 2020), UI344912060A13 (Year: 2020), UI347102055A13 (Year: 2020), UI356432155A13 (Year: 2021), UI356992155A13 (Year: 2021), UI359392160A13 (Year: 2021) Questioned Costs: Unknown Description: The Department of Labor (DOL) should improve internal controls over employer-filed Unemployment Compensation claims. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional UI provisions. Additionally, in response to the COVID-19 public health emergency, the National Emergency declaration by the President on March 13, 2020, and the Public Health State of Emergency declared by Governor Brian Kemp on March 14, 2020, the Georgia Department of Labor (DOL) Commissioner Mark Butler enacted Emergency Rule 300-2-4-0.5, containing Rule 300-2-4-.09(l) Partial Unemployment on March 16, 2020. The emergency rule allowed employers to file claims online on-behalf of their full-time and part-time employees with respect to any week during which an employee worked less than full-time due to a partial or total company shutdown caused by the COVID-19 public health emergency. To file on-behalf of the employee, the employer must download and submit the DOL template, which requires the employer to input all the necessary identity, demographic, work, and wage information to establish a claim. After the employer has submitted the file, the DOL benefit payment system will automatically process the claim. A monetary determination will be made based on the wages the DOL has on-file. The DOL, then, sends the employee a Benefit Determination (Form DOL-411G), which reflects whether they met the wage requirements to establish a benefit year and a valid claim. If a valid claim is established, the determination lists the weekly benefit amount, maximum benefit amount, and maximum number of weeks. The DOL paid out more than $2.5 billion and $9.2 billion in UC and CARES Act benefits, respectively, to over 1.1 million individuals for the fiscal year under review. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, the Uniform Guidance, Section 200.53 - Improper payments states: Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. An improper payment includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper. Furthermore, provisions included in Title 20 CFR Section 604.3(a) state: A State may pay UC only to an individual who is able to work and available for work for the week for which UC is claimed. Condition: Upon review of the procedures that the DOL established to process partial claims submitted by employers, deficiencies were noted. The DOL did not require employees to self-certify that they were able to work, available for work, and actively seeking work each week they received benefits. Furthermore, the claimant was unable to self-report additional wages and income the employee may have received from sources other than the employer that initially filed the claim. While auditors were unable to determine the total dollar amount of improper payments, the following dollar amounts of benefit payments were submitted and certified by the employer for 459,731 claimants and were affected by these deficiencies: ? UC $894,456,342 ? SEB $26,892,169 ? FPUC $1,141,827,795 ? PEUC $353,342,053 ? LWA $223,605,300 Moreover, the Georgia Department of Audits and Accounts (DOAA) is aware of an instance in which a part-time employer submitted a claim on-behalf of one of the DOAA?s own employees. This part-time employer did not notify the employee that they were submitting a claim on their behalf and did not obtain the employee?s additional wages and income. The DOL processed the employer-submitted claim and began paying the employee benefits though the employee was ineligible for such payments. In addition, our audit of the Unemployment Compensation Fund (UCF) included a review of benefit payments related to regular UC, State Extended Benefits (SEB), and CARES Act UI programs. Upon testing 244 benefit payment transactions processed by the DOL, it was noted that identity verification documentation was not maintained on-file for 23 employer-filed claims. Questioned Costs: Though likely questioned costs may exist, these amounts are unknown as sufficient data to analyze benefit payment transactions associated with these employer-filed claims was not available. The following Assistance Listing Numbers would be affected if questioned costs did exist: 17.225 and 17.225 ? COVID-19. Cause: The DOL management implemented a flawed employer-filed claim process that did not allow for the monitoring of the employees? ability to work and wage verification requirements. Effect: These deficiencies resulted in noncompliance with federal regulations and the Uniform Guidance. Due to lack of controls over employer-filed claims, specifically the inability for claimants to self-certify, it is likely that claimants were paid benefits that they were not eligible to receive. Because eligibility for UC benefits is based on claimants demonstrating that they meet certain eligibility requirements on a weekly basis, the suspension of the requirement for claimants to certify eligibility on a weekly basis did not allow the DOL to determine whether continuing claimants remained eligible for benefits. The State?s failure to administer its UI program in conformity and substantial compliance with federal law can result in loss of the State?s certification and loss of its administrative grant to operate the UC program and/or its employers? tax credits under Federal Unemployment Tax Act (FUTA). Recommendation: We recommend that the DOL develop a process to notify an employee when an employer-filed claim is submitted and to require the employee to create an account with the DOL, verify information, and self-certify employment status for the week being claimed. We also recommend that the DOL develop controls to prevent the release of payment when identity and eligibility requirements have not been substantiated and verified. In addition, we recommend that the DOL develop analytical procedures and queries to identify payments that have been made to claimants without identity verification and/or were otherwise ineligible to receive such payments. Views of Responsible Officials: The Georgia Department of Labor concurs in part and submits the following: The Employer Filed (Partial) Claims (EFC) program originated in the late 1960?s and was designed to allow employers with short term, temporary periods of lack of work for their employees to retain their workforce when work resumes. This is a program that many large manufacturers in Georgia rely on when they have temporary plant shutdowns and have for decades. When GDOL has attempted in the past to limit this program, we have met strong resistance from Georgia?s manufacturers. This program optimizes our ability to process and pay mass numbers of claims more quickly, such as what occurred at the beginning of the pandemic. EFCs may be filed by an employer with respect to any complete pay-period week during which an otherwise full-time employee works less than full-time, due to lack of work only, and earns an amount not exceeding his/her unemployment insurance weekly benefit amount. Such claims shall not be submitted or allowed for vacation days regardless of whether such vacation days were requested by the employee or established by the employer. Effective March 19, 2020, a temporary, Emergency Rule 300-2-4-05(1), containing Rule 300-2-4-.09(1) was signed which required employers to electronically submit EFCs on behalf of their employees whenever it is necessary to temporarily reduce work hours or there was no work available for a short period of time. Employers were allowed to file such claims for full and part time employees whose earnings had been reduced. In July 2020, the Rule was sunset and employers were no longer required to file EFCs. EFCs may be filed online by single entry or upload or paper. An employer may submit EFCs for regular state unemployment insurance programs including available extended benefits programs with the same eligibility requirements as regular UI, such as Pandemic Emergency Unemployment Compensation (PEUC) and State Extended Benefits (SEB), given all regular UI entitlement is exhausted. By electing to submit EFCs on behalf of the individuals, the employer is responsible for attesting to the employment status and weekly earnings of the individual for the EFC submitted. An affidavit certifying that the employer has obtained earnings from other employment as well as other requirements must be completed before EFCs can be entered or uploaded. Individuals for which EFCs are submitted are considered to be still attached to the employer and are exempt from the requirement to register for employment services per Georgia Employment Security Law Rules 300-2-4-.02. Such individuals are not required to be nor certify on a weekly basis to be able, available and actively seeking work. Summary Effective December 6, 2021, the EFC process was revised to require individuals (employees) to complete an EFC profile to include a real-time identity verification before payments can be made. Employers are responsible for submitting the request for the payment to certify to the individual?s employment status but the individuals must certify their identity and personal information for the claim to be processed. Employees are notified when a claim is filed on their behalf and provided instructions for their portion of completing the EFC process. The MyUI dashboard provides all the EFC correspondence sent to the individual as well as a status of the profile set up and identify verification. GDOL has no plans to stop utilizing the EFC program as it is an effective and popular program among employers with a successful 60-year track record. GDOL greatly appreciates the feedback and recommendations and will consider this information in future endeavors to modernize and update system and business processes. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, as noted in the finding details above, the DOAA has not suggested that the DOL discontinue the use of the employer-filed claims process but recommended that employee verification procedures be added to the process. Moreover, it appears that the DOL implemented these recommended employee verification processes after the audit period concluded. We reaffirm our finding and will review the status of the finding during our next audit.
2021-036 Improve Controls over Employer-Filed Claims Federal Agency: U.S. Department of Labor State Entity: Department of Labor The Georgia Department of Labor concurs in part and submits the following: The Employer Filed (Partial) Claims (EFC) program originated in the late 1960?s and was designed to allow employers with short term, temporary periods of lack of work for their employees to retain their workforce when work resumes. This is a program that many large manufacturers in Georgia rely on when they have temporary plant shutdowns and have for decades. When GDOL has attempted in the past to limit this program, we have met strong resistance from Georgia?s manufacturers. This program optimizes our ability to process and pay mass numbers of claims more quickly, such as what occurred at the beginning of the pandemic. EFCs may be filed by an employer with respect to any complete pay-period week during which an otherwise full-time employee works less than full-time, due to lack of work only, and earns an amount not exceeding his/her unemployment insurance weekly benefit amount. Such claims shall not be submitted or allowed for vacation days regardless of whether such vacation days were requested by the employee or established by the employer. Effective March 19, 2020, a temporary, Emergency Rule 300-2-4-05(1), containing Rule 300-2-4-.09(1) was signed which required employers to electronically submit EFCs on behalf of their employees whenever it is necessary to temporarily reduce work hours or there was no work available for a short period of time. Employers were allowed to file such claims for full and part time employees whose earnings had been reduced. In July 2020, the Rule was sunset and employers were no longer required to file EFCs. EFCs may be filed online by single entry or upload or paper. An employer may submit EFCs for regular state unemployment insurance programs including available extended benefits programs with the same eligibility requirements as regular UI, such as Pandemic Emergency Unemployment Compensation (PEUC) and State Extended Benefits (SEB), given all regular UI entitlement is exhausted. By electing to submit EFCs on behalf of the individuals, the employer is responsible for attesting to the employment status and weekly earnings of the individual for the EFC submitted. An affidavit certifying that the employer has obtained earnings from other employment as well as other requirements must be completed before EFCs can be entered or uploaded. Individuals for which EFCs are submitted are considered to be still attached to the employer and are exempt from the requirement to register for employment services per Georgia Employment Security Law Rules 300-2-4-.02. Such individuals are not required to be nor certify on a weekly basis to be able, available and actively seeking work. Summary Effective December 6, 2021, the EFC process was revised to require individuals (employees) to complete an EFC profile to include a real-time identity verification before payments can be made. Employers are responsible for submitting the request for the payment to certify to the individual?s employment status but the individuals must certify their identity and personal information for the claim to be processed. Employees are notified when a claim is filed on their behalf and provided instructions for their portion of completing the EFC process. The MyUI dashboard provides all the EFC correspondence sent to the individual as well as a status of the profile set up and identify verification. GDOL has no plans to stop utilizing the EFC program as it is an effective and popular program among employers with a successful 60-year track record. GDOL greatly appreciates the feedback and recommendations and will consider this information in future endeavors to modernize and update system and business processes.
The ETA-9130 reports for the quarters ending December 2020 and June 2021 were reviewed to ensure that program and administrative expenditures were reported in a timely and accurate manner. For seven of the 37 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. Variances identified on each report are as follows: See Schedule of Findings and Questioned Costs for chart/table. Cause: Separate ETA-9130 reports must be completed for each program and each fund source (subaccount) awarded to the DOL. While the DOL utilizes one general ledger report to prepare some ETA-9130 reports, the DOL uses multiple general ledger reports to prepare other ETA-9130 reports. For the seven reports that reflected variances, the DOL did not appropriately deduct general ledger amounts related to other programs when entering data on the ETA reporting site. Effect: The submitting of inaccurate ETA-9130 reports resulted in noncompliance with federal regulations and the Uniform Guidance. Additionally, submitting incorrect reports diminishes the U.S. Department of Labor?s ability to effectively monitor the UI program. Recommendation: We recommend that the DOL review existing policies and procedures to ensure that it has established and is maintaining internal controls related to compliance with federal laws, regulations, and program compliance reports. This review should specifically address requirements for preparing the ETA-9130 reports. The DOL should ensure that personnel responsible for the ETA-9130 reports are appropriately trained and are familiar with these compliance requirements. In addition, we recommend that the DOL create queries and general ledger reports that only report the expenditures charged to each individual program as reflected on the grant award. Furthermore, spreadsheets and tools should be developed to balance report totals and identify errors before entering amounts into the federal reporting website. Views of Responsible Officials: We concur with this finding: In initial periods of COVID grant awards some of our allocations were modified to adapt to the crisis which necessitated timing adjustments. Despite severe short-staffing and exponential increase in volume during FFY ended 9/30/2021, GDOL created additional queries and reports to assure that PMS documents were appropriately reconciled to our ledgers. With the addition of these tools, all submitted ETA-9130 reports were correctly stated as of 9/30/2021. As to the variances notated for these reports: UI312881855A13/UI31288BCO dated 12/31/2020, it was determined that the unliquidated balance was not expended during the grant period ending 12/31/2020. Since this grant was closed out on 2/3/2021, no additional entries are required. UI312881855A13/UI31288IKO dated 12/31/2020, it was determined that the unliquidated balance was not expended during the grant period ending 12/31/2020. Since this grant was closed out on 2/3/2021, no additional entries are required. UI347102055A13/UI34710Z70 dated 12/31/2020. It was determined that the Obligational Authority was reached; the adjustment amount was included on report UI347102055A13/ UI34710CIO dated 9/30/2021 which was also PEUC Administration. UI340532055A13/ UI34053V70 dated 12/31/2020. It was determined that the Obligational Authority was reached and the adjustment amount was included in the final report dated 12/31/2020. UI325941955A13/ UI32594Q11 dated 6/30/2021. It was determined that all of the expenses for the grant were recorded at PMS Doc# Q11 rather than splitting between PMS Doc #Q11 and PMS Doc #Q10 which are both PEUC Admin. On subsequent reports, PMS Doc Q11 is fully expended and PMS Doc Q10 is used to avoid duplication. UI347102055A13/ UI34710Z70 dated 6/30/2021. It was determined that the Obligational Authority was reached; however, the adjustment amount was included on report UI347102055A13/ UI34710CIO dated 9/30/2021 which was also PEUC Administration. UI34710205A13/ UI34710C80 dated 6/30/2021. An adjustment was recorded in the books in July 2021 and the expenditures were reflected on report UI347102055A13/ UI34710CIO dated 9/30/2021. Corrective action implemented.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF LABOR (continued) STATE ENTITY: DEPARTMENT OF LABOR (continued) 2021-037 Improve Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI312881855A13 (Year: 2018), UI325941955A13 (Year: 2019), UI340532055A13 (Year: 2020), UI347102055A13 (Year: 2020) Questioned Costs: None Identified Description: The Georgia Department of Labor submitted inaccurate financial reports for the Unemployment Insurance Program to the U.S. Department of Labor. Background Information: Every grant awarded by the U.S. Department of Labor?s Employment and Training Administration (ETA) requires accurate quarterly and annual reporting as a part of sound financial and management responsibilities. This reporting supports the ETA?s ability to measure fund utilization for performance accountability and assess compliance with statutory expenditure requirements. This information also helps measure successful outcomes for participants, ensure sound service delivery and reporting practices, and determine whether the federal funds achieved maximum benefit. The ETA 9130, Financial Status Report is used to report program and administrative expenditures. The Georgia Department of Labor (DOL) is required to submit quarterly financial reports for each UI program that they operate within 45 days after the end of reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state, in part, that ?the non-Federal entity?s financial management systems must? be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.? In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state, in part, that the non-Federal entity?s financial management systems must provide for ?accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.? Condition: The ETA-9130 reports for the quarters ending December 2020 and June 2021 were reviewed to ensure that program and administrative expenditures were reported in a timely and accurate manner. For seven of the 37 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. Variances identified on each report are as follows: See Schedule of Findings and Questioned Costs for chart/table. Cause: Separate ETA-9130 reports must be completed for each program and each fund source (subaccount) awarded to the DOL. While the DOL utilizes one general ledger report to prepare some ETA-9130 reports, the DOL uses multiple general ledger reports to prepare other ETA-9130 reports. For the seven reports that reflected variances, the DOL did not appropriately deduct general ledger amounts related to other programs when entering data on the ETA reporting site. Effect: The submitting of inaccurate ETA-9130 reports resulted in noncompliance with federal regulations and the Uniform Guidance. Additionally, submitting incorrect reports diminishes the U.S. Department of Labor?s ability to effectively monitor the UI program. Recommendation: We recommend that the DOL review existing policies and procedures to ensure that it has established and is maintaining internal controls related to compliance with federal laws, regulations, and program compliance reports. This review should specifically address requirements for preparing the ETA-9130 reports. The DOL should ensure that personnel responsible for the ETA-9130 reports are appropriately trained and are familiar with these compliance requirements. In addition, we recommend that the DOL create queries and general ledger reports that only report the expenditures charged to each individual program as reflected on the grant award. Furthermore, spreadsheets and tools should be developed to balance report totals and identify errors before entering amounts into the federal reporting website. Views of Responsible Officials: We concur with this finding: In initial periods of COVID grant awards some of our allocations were modified to adapt to the crisis which necessitated timing adjustments. Despite severe short-staffing and exponential increase in volume during FFY ended 9/30/2021, GDOL created additional queries and reports to assure that PMS documents were appropriately reconciled to our ledgers. With the addition of these tools, all submitted ETA-9130 reports were correctly stated as of 9/30/2021. As to the variances notated for these reports: UI312881855A13/UI31288BCO dated 12/31/2020, it was determined that the unliquidated balance was not expended during the grant period ending 12/31/2020. Since this grant was closed out on 2/3/2021, no additional entries are required. UI312881855A13/UI31288IKO dated 12/31/2020, it was determined that the unliquidated balance was not expended during the grant period ending 12/31/2020. Since this grant was closed out on 2/3/2021, no additional entries are required. UI347102055A13/UI34710Z70 dated 12/31/2020. It was determined that the Obligational Authority was reached; the adjustment amount was included on report UI347102055A13/ UI34710CIO dated 9/30/2021 which was also PEUC Administration. UI340532055A13/ UI34053V70 dated 12/31/2020. It was determined that the Obligational Authority was reached and the adjustment amount was included in the final report dated 12/31/2020. UI325941955A13/ UI32594Q11 dated 6/30/2021. It was determined that all of the expenses for the grant were recorded at PMS Doc# Q11 rather than splitting between PMS Doc #Q11 and PMS Doc #Q10 which are both PEUC Admin. On subsequent reports, PMS Doc Q11 is fully expended and PMS Doc Q10 is used to avoid duplication. UI347102055A13/ UI34710Z70 dated 6/30/2021. It was determined that the Obligational Authority was reached; however, the adjustment amount was included on report UI347102055A13/ UI34710CIO dated 9/30/2021 which was also PEUC Administration. UI34710205A13/ UI34710C80 dated 6/30/2021. An adjustment was recorded in the books in July 2021 and the expenditures were reflected on report UI347102055A13/ UI34710CIO dated 9/30/2021. Corrective action implemented.
2021-037 Improve Controls over Financial Reporting Federal Agency: U.S. Department of Labor State Entity: Department of Labor In initial periods of COVID grant awards some of our allocations were modified to adapt to the crisis which necessitated timing adjustments. Despite severe short-staffing and exponential increase in volume during FFY ended 9/30/2021, GDOL created additional queries and reports to assure that PMS documents were appropriately reconciled to our ledgers. With the addition of these tools, all submitted ETA-9130 reports were correctly stated as of 9/30/2021. As to the variances notated for these reports: ? UI312881855A13/UI31288BCO dated 12/31/2020, it was determined that the unliquidated balance was not expended during the grant period ending 12/31/2020. Since this grant was closed out on 2/3/2021, no additional entries are required. ? UI312881855A13/UI31288IKO dated 12/31/2020, it was determined that the unliquidated balance was not expended during the grant period ending 12/31/2020. Since this grant was closed out on 2/3/2021, no additional entries are required. ? UI347102055A13/UI34710Z70 dated 12/31/2020. It was determined that the Obligational Authority was reached; the adjustment amount was included on report UI347102055A13/ UI34710CIO dated 9/30/2021 which was also PEUC Administration. ? UI340532055A13/ UI34053V70 dated 12/31/2020. It was determined that the Obligational Authority was reached and the adjustment amount was included in the final report dated 12/31/2020. ? UI325941955A13/ UI32594Q11 dated 6/30/2021. It was determined that all of the expenses for the grant were recorded at PMS Doc# Q11 rather than splitting between PMS Doc #Q11 and PMS Doc #Q10 which are both PEUC Admin. On subsequent reports, PMS Doc Q11 is fully expended and PMS Doc Q10 is used to avoid duplication. ? UI347102055A13/ UI34710Z70 dated 6/30/2021. It was determined that the Obligational Authority was reached; however, the adjustment amount was included on report UI347102055A13/ UI34710CIO dated 9/30/2021 which was also PEUC Administration. ? UI34710205A13/ UI34710C80 dated 6/30/2021. An adjustment was recorded in the books in July 2021 and the expenditures were reflected on report UI347102055A13/ UI34710CIO dated 9/30/2021. Corrective action implemented.
In an effort to assess risk and plan audit procedures, auditors obtained an understanding of the internal controls over the processes for identifying and recording overpayments. In performing these procedures, the DOL stated that crossmatches used to identify possible overpayments were several quarters behind. Typically, the DOL runs crossmatches three to six months after a quarter?s benefits have been paid. However, the crossmatches for third quarter of 2020, which includes the months of July 2020 to September 2020, were not completed until September 2, 2021. Further, these crossmatches only included claimants paid regular UI benefits as the DOL was still testing the crossmatching process related to the CARES Act UI programs. Additionally, prior to the pandemic, the DOL reviewed 100% of the matches they received from the wage crossmatch process. Since the COVID-19 pandemic started, the DOL has had a significant increase in matches. The DOL stated that there were approximately 588,000 matches in the third quarter of 2020. Because the DOL?s Overpayment Unit has limited resources, a policy has been adopted to only review a percentage of the matches; therefore, the third-party vendor communicates the number of matches to the DOL, and the DOL communicates the percentage of these matches they would like uploaded to the Benefit Audit, Reporting, and Tracking System (BARTS). These matches are, then, investigated by the DOL. Upon requesting information associated with crossmatch identifications and the number of cases loaded into BARTS for overpayment investigation, the DOL stated the following: ? The crossmatches for the first quarter of 2020, which includes the months of January 2020 to March 2020, were completed on February 10, 2021. For regular UI programs, 51,346 matches were identified, and all of these cases were loaded into BARTS to be reviewed. ? The cross matches for the second quarter of 2020, which includes the months of April 2020 to June 2020, were completed on April 13, 2021. For regular UI programs, 51,559 matches were identified, and all of these cases were loaded into BARTS to be reviewed. ? The crossmatches for the third quarter of 2020, which includes the months of July 2020 to September 2020, were completed on September 2, 2021. For regular UI programs, 54,992 matches were identified, and all of these cases were loaded into BARTS to be reviewed. ? The crossmatch process for the fourth quarter of 2020, which includes the months of October 2020 to December 2020, was completed on March 16, 2022. ? For all quarters in 2020, the system to match PUA overpayments was still in the testing phase and not operational; therefore, no PUA overpayments were identified or recorded during the period under review. However, it was noted that the crossmatches for the first quarter of 2020 were completed on February 8, 2022 and the crossmatches for the second quarter of 2020 were completed on December 10, 2021. Based upon this information, auditors requested a complete population of overpayment cases and a reconciliation of the population to data reported on the ETA 227 and ETA 902P reports. Auditors planned to select a sample of overpayment cases that the DOL had established during the fiscal year under review and verify that the DOL was properly identifying and handling overpayments. Although the DOL provided a population of overpayment cases, a reconciliation of the data to the ETA 227 and ETA 902P reports was not be provided. While auditors attempted to reconcile the data to ensure that the population of overpayment cases was complete and accurate, this attempt was unsuccessful. Furthermore, initial crossmatch information provided to auditors during the audit planning process was not consistent with the detail of crossmatch identifications provided as the DOL stated that approximately 588,000 matches occurred during the third quarter of 2020 but only 54,992 matches could be documented. Therefore, auditors were not able to complete testing over overpayments. Cause: The benefit system was unable to track and provide reporting related to the CARES Act UI programs. The DOL did not have the ability to easily run transaction-level or claimant-level queries for overpayments in their systems. Furthermore, the DOL did not regularly reconcile overpayment data to subsystems, federal reports, or accounting records and was not able to do so in a timely manner when requested by DOAA and SAO. The DOL dedicated its resources to higher priorities to support its mission-essential functions due to the COVID-19 pandemic. Consequently, this delayed implementation of necessary system configurations required to support the overpayment processes until March of 2021. Effect: Due to the lack of controls, there is an increased risk that possible fraudulent claims and improper benefits paid during the fiscal year 2021 will not be identified and investigated. The deficiencies in the identification and recording of benefit overpayments resulted in noncompliance with federal and state regulations. Additionally, inaccurate reports were likely filed with the U.S. Department of Labor. Furthermore, the lack of accurate and complete data associated with benefit overpayments prevented auditors from testing compliance requirements associated with overpayments. These unknown factors, along with additional issues, are the basis for our adverse of opinion on the UI program. Recommendation: The DOL management should develop and implement procedures to identify and record benefit overpayments in a timely and accurate manner. These procedures should allow for the tracking of information by fiscal year and periodic reconciliation of detail records to the general ledger and various required reports. In addition, the DOL should dedicate appropriate resources and develop a plan to complete any remaining system modifications necessary to support the identification, tracking and reporting of overpayments both internally and to the U.S. Department of Labor associated with the CARES Act UI programs. Views of Responsible Officials: GDOL concurs in part with this finding with the following explanations: USDOL provides guidance and recommended procedures for crossmatches but does not dictate a frequency or cadence for performing them. The crossmatch process is conducted using Onpoint BARTS software which runs a systematic check against weeks in a quarter for which benefits are paid and wages are reported during the same quarter. Although the program may detect weeks paid and wages reported, this alone is not indicative of an overpayment. Therefore, the process involves verification correspondence being sent to both the claimant and the employer to verify the status of employment, the wages earned as well as the weeks in which an individual worked and earned the wages. Based on responses from both or either party, an assessment is made to determine if an overpayment exists and subsequent actions are taken accordingly. We are prohibited from assuming a match is an overpayment. It is not an overpayment until we have completed all the due process to the claimant. The audit report indicates misinterpretation of the data reflected on the federal reports, specifically the ETA 227. The ETA 227 is for reporting of overpayment detection and recovery activities that the Agency performed in a quarter. It is not for reporting the amount of benefits overpaid for specific weeks during that quarter. The Department will take the necessary actions to complete the overpayment reconciliation for the ETA 227 reports and 902 reports at the end of the calendar year. Due to the volume of claims and the number of cross matches that needed to be performed on all state and federal pandemic programs, it would require multiples of current GDOL staffing levels to review all cross matches, requiring increase levels of state and federal funding. Federal regulations require an actual person to review and establish fraudulent overpayments. Summary GDOL has developed an aggressive plan to complete all remaining state and pandemic program cross matches. We have filled all of our budgeted positions for the Overpayment Unit and are utilizing non-overpayment staff to assist with identification and overpayment investigations. Additionally, we are utilizing temp agency staff to perform some clerical duties; however, federal regulations prohibit non-merit staff from adjudicating and releasing overpayment decisions. We are starting to freeze the overpayment data at the end of every month so that we can conduct periodic reconciliation of the overpayment records. GDOL greatly appreciates the feedback and recommendations and will consider this information in future endeavors to modernize and update system and business processes. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, as noted in the finding details above, it is clear that procedures associated with the identification, recording, and reporting of UI benefit overpayments were not performed in a timely and accurate manner. We reaffirm our finding and will review the status of the finding during our next audit.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF LABOR (continued) STATE ENTITY: DEPARTMENT OF LABOR (continued) 2021-038 Improve Controls over the Identification, Recording, and Reporting of Overpayments Compliance Requirement: Reporting Special Tests and Provisions Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI312881855A13 (Year: 2018), UI325941955A13 (Year: 2019), UI328341960A13 (Year: 2019), UI340532055A13 (Year: 2020), UI341592055A13 (Year: 2020), UI344912060A13 (Year: 2020), UI347102055A13 (Year: 2020), UI356432155A13 (Year: 2021), UI356992155A13 (Year: 2021), UI359392160A13 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2020-038 Description: The Georgia Department of Labor did not maintain adequate controls over the identification, recording, and reporting of benefit overpayments associated with the Unemployment Insurance programs. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional UI provisions. Title II, Subtitle A of the CARES Act, authorizes the following temporary UI programs: ? Federal Pandemic Unemployment Compensation (FPUC) ? The FPUC program provides eligible individuals with $600 per week in addition to the weekly benefit amount they receive from certain other UC (Unemployment Compensation) programs. ? Pandemic Emergency Unemployment Compensation (PEUC) ? The PEUC program provides up to 13 weeks of benefits to individuals who have exhausted all rights to regular compensation under state law or Federal law with respect to a benefit year that ended on or after July 1, 2019, have no rights to regular compensation with respect to a week under any other State or Federal UC law, are not receiving compensation with respect to such week under the UC law of Canada, and are able to work, available to work, and actively seeking work. ? Pandemic Unemployment Assistance (PUA) ? The PUA program provides up to 39 weeks of benefits to those individuals who are not eligible for regular UC or extended benefits under State or Federal law or PEUC, including those who have exhausted all rights to such benefits. In addition, the State Extended Benefits (SEB) program, which is an extension of UC benefits, becomes available for payment when the State?s 13-week insured unemployment rate (IUR) exceeds 5% and pays claimants up to an additional 13 weeks of compensation. Under the SEB program, the State is required to provide 50% of the amounts paid to the majority of eligible SEB claimants, which are those not covered by Federal law or special provisions of State law. However, under the CARES Act, the U.S. Department of Labor will reimburse the State at 100% of eligible costs for the SEB program. The State of Georgia became eligible to pay SEB May 10, 2020. However, the first payable weekending date (WED) was on July 4, 2020, as the first payable WED of PEUC was April 4, 2020. Further, the last payable WED for SEB was February 6, 2021. Furthermore, the U.S. Department of Labor requires state agencies, including the Georgia Department of Labor (DOL), to prepare and submit various Employment Training Administration reports periodically. Benefit overpayment activity is based on a report from the benefits system and reflected on the following reports: ? ETA 227 ? Overpayment Detection and Recovery Activities report: The ETA 227 report provides information on non-fraud and fraudulent overpayments of intrastate and interstate claims under the regular state UI program, and under Federal UI programs, including those created by the CAREES Act with exception of PUA. The DOL?s accomplishments in principal detection areas of benefit payment control are shown on the ETA 227 report. The ETA and state agencies needs such information to monitor the integrity of the benefit payment processes in the UI system. ? ETA 902P ? Pandemic Unemployment Assistance Activities: The ETA 902P report is submitted electronically each month providing PUA activities performed during the preceding calendar month, including non-fraud and fraudulent overpayment activity and administration. The DOL paid out more than $2.5 billion and $9.2 billion in UC and CARES Act benefits, respectively, to over 1.1 million individuals for the fiscal year under review. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Title 34, Chapter 8, Article 9 of the Official Code of Georgia Annotated (OCGA) ?34-8-254 defines overpayments as the sum of benefits received by any person while any conditions for the receipt of benefits were not fulfilled or while the person was disqualified from receiving benefits. OCGA ?34-8-254 assigns legal responsibility and authority for the collection of overpayments to the Commissioner of the DOL. Additionally, per the UI Report Handbook No. 401, the ETA 227 and ETA 902P reports are required to be submitted to the U.S. Department of Labor in a timely and accurate manner. The ETA 227 reports are due quarterly on the first day of the second month after the quarter of reference, and all applicable date on the ETA 227 reports should be traceable to the data regarding overpayments and recoveries in the state?s financial accounting system. The ETA 902P report is due on the 30th of the month following the month to which data relate and should contain monthly data on PUA activities. Condition: In an effort to assess risk and plan audit procedures, auditors obtained an understanding of the internal controls over the processes for identifying and recording overpayments. In performing these procedures, the DOL stated that crossmatches used to identify possible overpayments were several quarters behind. Typically, the DOL runs crossmatches three to six months after a quarter?s benefits have been paid. However, the crossmatches for third quarter of 2020, which includes the months of July 2020 to September 2020, were not completed until September 2, 2021. Further, these crossmatches only included claimants paid regular UI benefits as the DOL was still testing the crossmatching process related to the CARES Act UI programs. Additionally, prior to the pandemic, the DOL reviewed 100% of the matches they received from the wage crossmatch process. Since the COVID-19 pandemic started, the DOL has had a significant increase in matches. The DOL stated that there were approximately 588,000 matches in the third quarter of 2020. Because the DOL?s Overpayment Unit has limited resources, a policy has been adopted to only review a percentage of the matches; therefore, the third-party vendor communicates the number of matches to the DOL, and the DOL communicates the percentage of these matches they would like uploaded to the Benefit Audit, Reporting, and Tracking System (BARTS). These matches are, then, investigated by the DOL. Upon requesting information associated with crossmatch identifications and the number of cases loaded into BARTS for overpayment investigation, the DOL stated the following: ? The crossmatches for the first quarter of 2020, which includes the months of January 2020 to March 2020, were completed on February 10, 2021. For regular UI programs, 51,346 matches were identified, and all of these cases were loaded into BARTS to be reviewed. ? The cross matches for the second quarter of 2020, which includes the months of April 2020 to June 2020, were completed on April 13, 2021. For regular UI programs, 51,559 matches were identified, and all of these cases were loaded into BARTS to be reviewed. ? The crossmatches for the third quarter of 2020, which includes the months of July 2020 to September 2020, were completed on September 2, 2021. For regular UI programs, 54,992 matches were identified, and all of these cases were loaded into BARTS to be reviewed. ? The crossmatch process for the fourth quarter of 2020, which includes the months of October 2020 to December 2020, was completed on March 16, 2022. ? For all quarters in 2020, the system to match PUA overpayments was still in the testing phase and not operational; therefore, no PUA overpayments were identified or recorded during the period under review. However, it was noted that the crossmatches for the first quarter of 2020 were completed on February 8, 2022 and the crossmatches for the second quarter of 2020 were completed on December 10, 2021. Based upon this information, auditors requested a complete population of overpayment cases and a reconciliation of the population to data reported on the ETA 227 and ETA 902P reports. Auditors planned to select a sample of overpayment cases that the DOL had established during the fiscal year under review and verify that the DOL was properly identifying and handling overpayments. Although the DOL provided a population of overpayment cases, a reconciliation of the data to the ETA 227 and ETA 902P reports was not be provided. While auditors attempted to reconcile the data to ensure that the population of overpayment cases was complete and accurate, this attempt was unsuccessful. Furthermore, initial crossmatch information provided to auditors during the audit planning process was not consistent with the detail of crossmatch identifications provided as the DOL stated that approximately 588,000 matches occurred during the third quarter of 2020 but only 54,992 matches could be documented. Therefore, auditors were not able to complete testing over overpayments. Cause: The benefit system was unable to track and provide reporting related to the CARES Act UI programs. The DOL did not have the ability to easily run transaction-level or claimant-level queries for overpayments in their systems. Furthermore, the DOL did not regularly reconcile overpayment data to subsystems, federal reports, or accounting records and was not able to do so in a timely manner when requested by DOAA and SAO. The DOL dedicated its resources to higher priorities to support its mission-essential functions due to the COVID-19 pandemic. Consequently, this delayed implementation of necessary system configurations required to support the overpayment processes until March of 2021. Effect: Due to the lack of controls, there is an increased risk that possible fraudulent claims and improper benefits paid during the fiscal year 2021 will not be identified and investigated. The deficiencies in the identification and recording of benefit overpayments resulted in noncompliance with federal and state regulations. Additionally, inaccurate reports were likely filed with the U.S. Department of Labor. Furthermore, the lack of accurate and complete data associated with benefit overpayments prevented auditors from testing compliance requirements associated with overpayments. These unknown factors, along with additional issues, are the basis for our adverse of opinion on the UI program. Recommendation: The DOL management should develop and implement procedures to identify and record benefit overpayments in a timely and accurate manner. These procedures should allow for the tracking of information by fiscal year and periodic reconciliation of detail records to the general ledger and various required reports. In addition, the DOL should dedicate appropriate resources and develop a plan to complete any remaining system modifications necessary to support the identification, tracking and reporting of overpayments both internally and to the U.S. Department of Labor associated with the CARES Act UI programs. Views of Responsible Officials: GDOL concurs in part with this finding with the following explanations: USDOL provides guidance and recommended procedures for crossmatches but does not dictate a frequency or cadence for performing them. The crossmatch process is conducted using Onpoint BARTS software which runs a systematic check against weeks in a quarter for which benefits are paid and wages are reported during the same quarter. Although the program may detect weeks paid and wages reported, this alone is not indicative of an overpayment. Therefore, the process involves verification correspondence being sent to both the claimant and the employer to verify the status of employment, the wages earned as well as the weeks in which an individual worked and earned the wages. Based on responses from both or either party, an assessment is made to determine if an overpayment exists and subsequent actions are taken accordingly. We are prohibited from assuming a match is an overpayment. It is not an overpayment until we have completed all the due process to the claimant. The audit report indicates misinterpretation of the data reflected on the federal reports, specifically the ETA 227. The ETA 227 is for reporting of overpayment detection and recovery activities that the Agency performed in a quarter. It is not for reporting the amount of benefits overpaid for specific weeks during that quarter. The Department will take the necessary actions to complete the overpayment reconciliation for the ETA 227 reports and 902 reports at the end of the calendar year. Due to the volume of claims and the number of cross matches that needed to be performed on all state and federal pandemic programs, it would require multiples of current GDOL staffing levels to review all cross matches, requiring increase levels of state and federal funding. Federal regulations require an actual person to review and establish fraudulent overpayments. Summary GDOL has developed an aggressive plan to complete all remaining state and pandemic program cross matches. We have filled all of our budgeted positions for the Overpayment Unit and are utilizing non-overpayment staff to assist with identification and overpayment investigations. Additionally, we are utilizing temp agency staff to perform some clerical duties; however, federal regulations prohibit non-merit staff from adjudicating and releasing overpayment decisions. We are starting to freeze the overpayment data at the end of every month so that we can conduct periodic reconciliation of the overpayment records. GDOL greatly appreciates the feedback and recommendations and will consider this information in future endeavors to modernize and update system and business processes. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, as noted in the finding details above, it is clear that procedures associated with the identification, recording, and reporting of UI benefit overpayments were not performed in a timely and accurate manner. We reaffirm our finding and will review the status of the finding during our next audit.
2021-038 Improve Controls over the Identification, Recording, and Reporting of Overpayments Federal Agency: U.S. Department of Labor State Entity: Department of Labor USDOL provides guidance and recommended procedures for crossmatches but does not dictate a frequency or cadence for performing them. The crossmatch process is conducted using vendor software which runs a systematic check against weeks in a quarter for which benefits are paid and wages are reported during the same quarter. Although the program may detect weeks paid and wages reported, this alone is not indicative of an overpayment. Therefore, the process involves verification correspondence being sent to both the claimant and the employer to verify the status of employment, the wages earned as well as the weeks in which an individual worked and earned the wages. Based on responses from both or either party, an assessment is made to determine if an overpayment exists and subsequent actions are taken accordingly. We are prohibited from assuming a match is an overpayment. It is not an overpayment until we have completed all the due process to the claimant. The audit report indicates misinterpretation of the data reflected on the federal reports, specifically the ETA 227. The ETA 227 is for reporting of overpayment detection and recovery activities that the Agency performed in a quarter. It is not for reporting the amount of benefits overpaid for specific weeks during that quarter. The Department will take the necessary actions to complete the overpayment reconciliation for the ETA 227 reports and 902 reports at the end of the calendar year. Due to the volume of claims and the number of cross matches that needed to be performed on all state and federal pandemic programs, it would require multiples of current GDOL staffing levels to review all cross matches, requiring increase levels of state and federal funding. Federal regulations require an actual person to review and establish fraudulent overpayments. Summary GDOL has developed an aggressive plan to complete all remaining state and pandemic program cross matches. We have filled all of our budgeted positions for the Overpayment Unit and are utilizing non-overpayment staff to assist with identification and overpayment investigations. Additionally, we are utilizing temp agency staff to perform some clerical duties; however, federal regulations prohibit non-merit staff from adjudicating and releasing overpayment decisions. We are starting to freeze the overpayment data at the end of every month so that we can conduct periodic reconciliation of the overpayment records. GDOL greatly appreciates the feedback and recommendations and will consider this information in future endeavors to modernize and update system and business processes.
2020-038
See Financial Finding at 2021-005. Cause: See Financial Finding at 2021-005. Effect: See Financial Finding at 2021-005. Recommendation: See Financial Finding at 2021-005. Views of Responsible Officials: The Department concurs with this finding: a) The Department agrees that the objective of the logical controls process is to avoid the unnecessary risk of unauthorized access to the unemployment insurance and possible manipulation or loss of data. b) During the FY20 and FY21 periods, the agency was operating under exceptional circumstances due to the COVID-19 pandemic. The GDOL was faced with multiple priorities while attempting to process the unprecedented volume of unemployment benefits claims established through regular UI, as well as the five new federal programs enacted by congress. c) During the pandemic, in order to help provide timely payments to eligible claimants, many users within the agency were granted additional access, commensurate to their additional responsibilities, to help process the overwhelming volume of claims. A user?s ?normal? role may not require additional transactional access, however the ?expanded? roles did require it in order to work to process claims in a timely manner. Everyone at the agency had expanded roles and responsibilities in the ?all-hands-on-deck? approach that was necessary and required by the agency in order to process the overwhelming volume of more than five million claims received during this unprecedented time. d) GDOL Information Technology instituted a process in FY16 for performing annual global access monitoring, to insure users only have access to the information for which they are authorized and need to perform their official duties, as well as to serve to further mitigate any risk of unauthorized access to systems within the Department network. This process has subsequently been executed annually from FY16 through FY19 as part of our standard operating procedure. The Information Technology division enhanced the annual transaction access review in FY19 to include a biennial role design review with the appropriate business units to insure transactions assigned to the role continue to be appropriate based on job responsibilities and business functions.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF LABOR (continued) STATE ENTITY: DEPARTMENT OF LABOR (continued) 2021-039 Strengthen Logical Access Controls Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI312881855A13 (Year: 2018), UI325941955A13 (Year: 2019), UI328341960A13 (Year: 2019), UI340532055A13 (Year: 2020), UI341592055A13 (Year: 2020), UI344912060A13 (Year: 2020), UI347102055A13 (Year: 2020), UI356432155A13 (Year: 2021), UI356992155A13 (Year: 2021), UI359392160A13 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2020-037 Description: The Georgia Department of Labor should strengthen logical access controls over the unemployment insurance system. Background Information: See Financial Finding at 2021-005. Criteria: See Financial Finding at 2021-005. Condition: See Financial Finding at 2021-005. Cause: See Financial Finding at 2021-005. Effect: See Financial Finding at 2021-005. Recommendation: See Financial Finding at 2021-005. Views of Responsible Officials: The Department concurs with this finding: a) The Department agrees that the objective of the logical controls process is to avoid the unnecessary risk of unauthorized access to the unemployment insurance and possible manipulation or loss of data. b) During the FY20 and FY21 periods, the agency was operating under exceptional circumstances due to the COVID-19 pandemic. The GDOL was faced with multiple priorities while attempting to process the unprecedented volume of unemployment benefits claims established through regular UI, as well as the five new federal programs enacted by congress. c) During the pandemic, in order to help provide timely payments to eligible claimants, many users within the agency were granted additional access, commensurate to their additional responsibilities, to help process the overwhelming volume of claims. A user?s ?normal? role may not require additional transactional access, however the ?expanded? roles did require it in order to work to process claims in a timely manner. Everyone at the agency had expanded roles and responsibilities in the ?all-hands-on-deck? approach that was necessary and required by the agency in order to process the overwhelming volume of more than five million claims received during this unprecedented time. d) GDOL Information Technology instituted a process in FY16 for performing annual global access monitoring, to insure users only have access to the information for which they are authorized and need to perform their official duties, as well as to serve to further mitigate any risk of unauthorized access to systems within the Department network. This process has subsequently been executed annually from FY16 through FY19 as part of our standard operating procedure. The Information Technology division enhanced the annual transaction access review in FY19 to include a biennial role design review with the appropriate business units to insure transactions assigned to the role continue to be appropriate based on job responsibilities and business functions.
2021-039 Strengthen Logical Access Controls Federal Agency: U.S. Department of Labor State Entity: Department of Labor As was normal pre-pandemic, going forward the Information Technology division will continue to follow established user access reviews and continue to collaborate with business units to design more specific roles to align more closely with each user?s role and daily tasks as appropriate. ? Completion of the global access monitoring for 2021 - completed in December, 2021. The next scheduled annual transaction access review is December, 2022. ? Completion of the biennial role design review - completed October, 2021. Future role design reviews will be completed biennially to insure transactions assigned to the role continue to be appropriate based on the job responsibilities and business functions of each individual.
2020-037
Upon review of the Financial Progress Reports submitted throughout the fiscal year, it was noted that no improvements in the documenting of the review and approval of these reports occurred from the prior year. As noted previously, the auditors were able to review the Financial Progress Report reconciliation performed by the OPB and determine the report was materially accurate; however, no evidence of a formal supervisory review and approval of this reconciliation was maintained on-file. For those expenditures processed through the grants management system, a sample of 60 expenditure transactions were randomly selected for testing using non-statistical sampling methods. Auditors found that CRF funds in the amount of $8,355 were advanced to a subrecipient and no supporting expenditure documentation was submitted to keep the funds as required per the OPB?s policy. Auditors also noted that expenditures totaling $453,012,682 were reported on the SEFA as of year-end but had not yet been processed through the grants management system review process as described in OPB?s prior year corrective action plan. The OPB management indicated that these expenditures were reported on the SEFA based on informal conversations held between the OPB and those state agencies requesting funds without reviewing the underlying documentation and documenting approval in the grants management system. A sample of 60 of these expenditures was randomly selected for testing using non-statistical sampling methods. Through our review against the criteria for allowability, no unallowable expenditures were identified in the sample. Supporting documentation of the expenditures was maintained at each respective state agency. Questioned Costs: Known questioned costs of $8,355 were identified for the one undocumented expenditure included in the sample of CRF expenditures processed through the grants management system. Using the population of CRF expenditures processed through the grants management system, which totaled $512,961,368, we project the likely questioned costs to be approximately $429,763. Cause: The OPB did not maintain documentation of review and approval of the Financial Progress Reports submitted to the PRAC. In addition, the OPB did not consistently follow its documented internal control processes and prior year corrective action plan in reviewing and approving CRF expenditures. Effect: The lack of proper review and approval increases the risk that inappropriate information could be transmitted on the Financial Progress Report and published on the PRAC website. The unallowable payments identified by auditors resulted in potential noncompliance with federal regulations and questioned costs. By not complying with federal regulations, the OPB risks having to repay federal funds or having future federal funds withheld. By not following documented internal controls nor conducting a timely review and approval of expenditures, there is increased risk that unallowable activities and costs could be charged to the CRF program. Recommendation: The OPB management should also ensure that evidence of supervisory review and approval of the Financial Progress Report is maintained on-file. The OPB should seek appropriate documentation or request repayment from the subrecipient for which adequate supporting documentation was not submitted. As the period of performance for the CRF program ended on December 31, 2021, the OPB should follow its established internal controls and review, approve and document all expenditures in the grants management system to ensure compliance with grant program requirements. Views of Responsible Officials: We do not concur with this finding. With regards to the $453,012,682 reflected in the SEFA that had not yet been reimbursed through OPB?s grant management system, OPB does not agree with DOAA?s assessment that this increases risk of unallowable activities or costs being charged to the CRF program. OPB worked closely with each state agency in reviewing expenses incurred as a result of an agency?s pandemic response. OPB conducts quarterly expense reviews of all agencies, reviews financial information in processing budgetary amendments to recognize CRF in an agency?s budget, reviews all expenses prior to reporting them through the Financial Progress Report, and conducts a two-level review of supporting documentation of all expenses prior to the release of funds on a reimbursement basis only through its grant management system. The majority of the funds that had not yet been reimbursed through the grants management system but had already been paid as an expense were related to a surge medical staffing contract held by the Department of Community Health. OPB, in conjunction with the direction of the Governor, authorized the encumbrance of CRF funds via contract with the provider. OPB and the Department communicated weekly regarding activity on the contract and current expense. Given the timing of medical billing and the volume of documentation associated with invoicing on the contract, there were timing delays between the Department incurring the expense and submitting for reimbursement through the grant management system. As a result of OPB?s continuous review of agency pandemic response activities, almost no expenses ultimately submitted through the grants management system for reimbursement were rejected due to unallowability, and as DOAA noted, in its review of sampled expenses, none were found to be unallowable. In submitting the quarterly federal Financial Progress Report, the report information was entered by the Deputy Director of OPB based on data provided by the State Accounting Office and through OPB?s GrantCare system and was subsequently reviewed by either the Director of Administration or the Grants Manager prior to official submittal to the federal government. OPB provided documentation of emails and meeting notices between the Deputy Director and either the Director of Administration or Grants Manager to review the supporting report documentation. In order to facilitate documentation for future audit review, OPB will subsequently collect an official signature page from the Director of Administration attesting to his or her review of the underlying report prior to report submission. Finally, as part of the closeout process for the Coronavirus Relief Fund, OPB has notified any local governments who received advance funding and did not provide adequate documentation of expense, including the $8,355 noted by the Department of Audits and Accounts. OPB is in the process of recouping those funds to return to the federal government. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on various State agencies, including the OPB, due to the effects of the COVID-19 pandemic and the urgent response necessary. However, as reflected in the ?Criteria? above, recipients of federal awards are required to establish and maintain effective internal controls over all applicable compliance requirements. Additionally, provisions included in the Uniform Guidance, Section 200.514 require auditors to test these internal controls, and when internal controls cannot be tested or are deemed ineffective, issue a significant deficiency or material weakness finding. As noted in the ?Condition? above, auditors did not observe the appropriate evidence of approval for those expenditures that had not been processed through the grants management system or the appropriate evidence of review and approval of the Financial Progress Reports. We reaffirm our finding and will review the status of the OPB?s corrective action during our next audit.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF THE TREASURY STATE ENTITY: OFFICE OF THE GOVERNOR 2021-040 Continue to Improve Internal Controls Activities over the Coronavirus Relief Fund Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Treasury Pass-Through Entity: None AL Number and Title: COVID-19 ? 20.019 ? Coronavirus Relief Fund Federal Award Number: None Provided (Year:2020) Questioned Costs: $8,355.00 Repeat of Prior Year Finding: 2020-040 Description: The Governor?s Office of Planning and Budget should continue to strengthen internal controls to ensure that appropriate reviews and approvals occur and adequate documentation is maintained for expenditures and reporting related to the Coronavirus Relief Fund. Background Information: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for State, Local, and Tribal governments navigating the impact of the COVID-19 outbreak. Title VI, Section 601 of the CARES Act appropriated $150 billion to States, Tribal governments and units of local government through the establishment of the Coronavirus Relief Fund (CRF). Of this funding, the State of Georgia received $3.5 billion. The Governor?s Office of Planning and Budget (OPB) was designated as the custodian of the CRF funds for the State of Georgia. In that capacity the OPB was responsible for overseeing the review, approval, and disbursement of reimbursements. The State of Georgia is also required to report details associated with these expenditures to the U.S. Department of Treasury?s Office of Inspector General. The information is submitted through the GrantSolutions portal and reflected on the quarterly Financial Progress Report. This data is provided to the Pandemic Response Accountability Committee (PRAC) and published on its website, as well. CRF funds totaling $2.3 billion were expended and reported on the State of Georgia?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2021. As part of our fiscal year 2021 audit, we followed up on the OPB?s efforts to implement corrective action plans in response to the prior year finding in which we reported that the OPB needed to strengthen internal controls to ensure that appropriate reviews and approvals occur and adequate documentation is maintained for expenditures and reporting related to the CRF program. Criteria: As a recipient of federal awards, the OPB is required to establish and maintain effective internal controls over federal awards that provide reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award pursuant to Title 2. U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 ? Internal Controls. Additionally, Title VI, Section 601(d) of the CARES Act as amended by the Consolidated Appropriations Act of 2021 provides guidance for the use of CRF funds and states: A State, Tribal government, and unit of local government shall use the funds provided? to cover only those costs of the State, Tribal government, or unit of local government that ? (1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the budget most recently approved as of the date of enactment of this section for the State or government; and (3) were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021. In OPB?s corrective action plan related to fiscal year 2020 finding 2020-040, the defined control being established for the review of allowability of expenditures under the confines of the CRF program was the use of a grants management system. This system includes two levels of review, which includes a review of supporting documentation, prior to the approval of submitted reimbursement requests. Additionally, the corrective action plan states the OPB will maintain evidence of supervisory review and approval of the Financial Progress Reports. Condition: Upon review of the Financial Progress Reports submitted throughout the fiscal year, it was noted that no improvements in the documenting of the review and approval of these reports occurred from the prior year. As noted previously, the auditors were able to review the Financial Progress Report reconciliation performed by the OPB and determine the report was materially accurate; however, no evidence of a formal supervisory review and approval of this reconciliation was maintained on-file. For those expenditures processed through the grants management system, a sample of 60 expenditure transactions were randomly selected for testing using non-statistical sampling methods. Auditors found that CRF funds in the amount of $8,355 were advanced to a subrecipient and no supporting expenditure documentation was submitted to keep the funds as required per the OPB?s policy. Auditors also noted that expenditures totaling $453,012,682 were reported on the SEFA as of year-end but had not yet been processed through the grants management system review process as described in OPB?s prior year corrective action plan. The OPB management indicated that these expenditures were reported on the SEFA based on informal conversations held between the OPB and those state agencies requesting funds without reviewing the underlying documentation and documenting approval in the grants management system. A sample of 60 of these expenditures was randomly selected for testing using non-statistical sampling methods. Through our review against the criteria for allowability, no unallowable expenditures were identified in the sample. Supporting documentation of the expenditures was maintained at each respective state agency. Questioned Costs: Known questioned costs of $8,355 were identified for the one undocumented expenditure included in the sample of CRF expenditures processed through the grants management system. Using the population of CRF expenditures processed through the grants management system, which totaled $512,961,368, we project the likely questioned costs to be approximately $429,763. Cause: The OPB did not maintain documentation of review and approval of the Financial Progress Reports submitted to the PRAC. In addition, the OPB did not consistently follow its documented internal control processes and prior year corrective action plan in reviewing and approving CRF expenditures. Effect: The lack of proper review and approval increases the risk that inappropriate information could be transmitted on the Financial Progress Report and published on the PRAC website. The unallowable payments identified by auditors resulted in potential noncompliance with federal regulations and questioned costs. By not complying with federal regulations, the OPB risks having to repay federal funds or having future federal funds withheld. By not following documented internal controls nor conducting a timely review and approval of expenditures, there is increased risk that unallowable activities and costs could be charged to the CRF program. Recommendation: The OPB management should also ensure that evidence of supervisory review and approval of the Financial Progress Report is maintained on-file. The OPB should seek appropriate documentation or request repayment from the subrecipient for which adequate supporting documentation was not submitted. As the period of performance for the CRF program ended on December 31, 2021, the OPB should follow its established internal controls and review, approve and document all expenditures in the grants management system to ensure compliance with grant program requirements. Views of Responsible Officials: We do not concur with this finding. With regards to the $453,012,682 reflected in the SEFA that had not yet been reimbursed through OPB?s grant management system, OPB does not agree with DOAA?s assessment that this increases risk of unallowable activities or costs being charged to the CRF program. OPB worked closely with each state agency in reviewing expenses incurred as a result of an agency?s pandemic response. OPB conducts quarterly expense reviews of all agencies, reviews financial information in processing budgetary amendments to recognize CRF in an agency?s budget, reviews all expenses prior to reporting them through the Financial Progress Report, and conducts a two-level review of supporting documentation of all expenses prior to the release of funds on a reimbursement basis only through its grant management system. The majority of the funds that had not yet been reimbursed through the grants management system but had already been paid as an expense were related to a surge medical staffing contract held by the Department of Community Health. OPB, in conjunction with the direction of the Governor, authorized the encumbrance of CRF funds via contract with the provider. OPB and the Department communicated weekly regarding activity on the contract and current expense. Given the timing of medical billing and the volume of documentation associated with invoicing on the contract, there were timing delays between the Department incurring the expense and submitting for reimbursement through the grant management system. As a result of OPB?s continuous review of agency pandemic response activities, almost no expenses ultimately submitted through the grants management system for reimbursement were rejected due to unallowability, and as DOAA noted, in its review of sampled expenses, none were found to be unallowable. In submitting the quarterly federal Financial Progress Report, the report information was entered by the Deputy Director of OPB based on data provided by the State Accounting Office and through OPB?s GrantCare system and was subsequently reviewed by either the Director of Administration or the Grants Manager prior to official submittal to the federal government. OPB provided documentation of emails and meeting notices between the Deputy Director and either the Director of Administration or Grants Manager to review the supporting report documentation. In order to facilitate documentation for future audit review, OPB will subsequently collect an official signature page from the Director of Administration attesting to his or her review of the underlying report prior to report submission. Finally, as part of the closeout process for the Coronavirus Relief Fund, OPB has notified any local governments who received advance funding and did not provide adequate documentation of expense, including the $8,355 noted by the Department of Audits and Accounts. OPB is in the process of recouping those funds to return to the federal government. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on various State agencies, including the OPB, due to the effects of the COVID-19 pandemic and the urgent response necessary. However, as reflected in the ?Criteria? above, recipients of federal awards are required to establish and maintain effective internal controls over all applicable compliance requirements. Additionally, provisions included in the Uniform Guidance, Section 200.514 require auditors to test these internal controls, and when internal controls cannot be tested or are deemed ineffective, issue a significant deficiency or material weakness finding. As noted in the ?Condition? above, auditors did not observe the appropriate evidence of approval for those expenditures that had not been processed through the grants management system or the appropriate evidence of review and approval of the Financial Progress Reports. We reaffirm our finding and will review the status of the OPB?s corrective action during our next audit.
2021-040 Continue to Improve Internal Controls Activities over the Coronavirus Relief Fund Federal Agency: U.S. Department of the Treasury State Entity: Office of the Governor (OPB) As part of the closeout process for the Coronavirus Relief Fund, OPB will continue to utilize its grant management system to review and disburse reimbursement to state agencies for any remaining spending and has notified any remaining local governments who received advance funding and did not provide adequate documentation of expense or their remittance requirements. OPB is in the process of recouping those funds to return to the federal government. Finally, for any future federal financial reporting, OPB will collect an official signature page from the Director of Administration attesting to his or her review of the underlying report prior to report submission.
2020-040
The OPB did not comply with pass-through entity requirements associated with subrecipients during the period under review. The OPB was unable to locate any evidence that required risk assessments, which reflected the OPB?s evaluation of the risk of noncompliance with federal regulations and the terms and conditions of the subaward, were performed for subrecipients of the CRF program. Additionally, the OPB did not verify that audits of subrecipients were conducted for those expending $750,000 or more in federal funds. Further, the results of these audits were not considered in the risk assessment process and followed-up on to ensure that the subrecipients took appropriate and timely action to correct any deficiencies noted in the audits. Cause: The OPB has no policies or procedures in place to address how risk assessments of subrecipients should be performed and documented. Additionally, the OPB has no policies and procedures in place to ensure subrecipients were audited and that results of the audit are reviewed so that prompt and meaningful management decisions can be issued in accordance with federal requirements. The OPB management were unaware of all the oversight responsibilities of pass-through entities under the Uniform Guidance and believed they were meeting the requirements through their established process of reviewing all expense reimbursement requests. Effect: The subrecipient monitoring deficiencies resulted in noncompliance with federal regulations. Without effective subrecipient monitoring controls in place to ensure compliance with all applicable federal requirements, there is an increased risk of federal funds being expended for unallowable purposes, subrecipients not properly administering federal programs in accordance with federal statutes, regulations, and the terms and conditions of the subawards, and untimely detection and correction of noncompliance. Recommendation: We recommend that the OPB: ? Ensure the required risk assessments are performed and documented, which would allow management to evaluate the results and demonstrate compliance with federal requirements; ? Utilize the results of risk assessments to determine how much and what type of monitoring of subrecipients will be performed to ensure proper accountability and compliance with program requirements; and ? Establish adequate internal controls, including policies and procedures, to ensure that subrecipients receive audits when necessary, the results of these audits are considered in the risk assessment process, and timely management decisions are made for any audit findings pertaining to federal awards. Views of Responsible Officials: We do not concur with this finding. OPB disagrees with the finding that there were insufficient internal controls regarding subrecipient risk assessment and monitoring. Coronavirus Relief Funds (CRF) were provided to other state agencies, local governments, and licensed long-term care facilities as emergency financial relief to reimburse these entities for direct disaster response costs. Unlike other traditional federal programs, entities did not apply to OPB to be awarded funds to implement a grant program. Instead, the state used the relief funds to cover already incurred expenses related to the pandemic for pre-selected entities that were hardest hit and directly responding to the national disaster. Pursuant to Uniform Guidance, Section 200.331, in reviewing these recipients experience with the same or similar subawards, there was no precedence for such previous pandemic emergency response spending for these entities. In selecting nursing home subrecipients, OPB worked with the Department of Community Health to create a list of licensed long-term care facilities under federal mandate to test employees for COVID-19. All facilities were already reviewed and licensed by the state, which includes an affidavit of financial stability from a certified public accountant for assisted living facilities and personal care homes. Long term care facilities are also, with very limited exceptions of private pay only facilities, certified by the Centers for Medicaid and Medicare Services (CMS) as providers and must comply with federal regulations and oversight to maintain that certification. Finally, in evaluating and mitigating risk with subrecipients, no funds were advanced to any facilities and use of funds was limited to reimbursement of COVID-19 testing of employees only. Funds were disbursed on a reimbursement only basis upon review of documentation of expense. Facilities were required to provide invoices and documentation of all expenses prior to the release of funds, and all expense requests underwent a two-level review process within OPB prior to approval. Based on the pre-selection review and licensure by both federal and state entities coupled with OPB?s multi-level review of all documentation of expense prior to the release of funds, OPB found that there should be minimal risk of fraud in disbursing funds to long-term care facilities. With regards to Single Audit requirements, for-profit entities do not have a federal requirement under 2 CFR 200; however, all long-term care facilities were required to sign a terms and conditions document with OPB establishing requirements for the funds and compliance with applicable federal laws. Additionally, transfers to local governments were done pursuant to direction from the U.S. Treasury that states were responsible for any such disbursements to local governments not directly receiving CRF from Treasury. Specifically, U.S. Treasury guidance in FAQ 33, states ?This statutory structure was based on a recognition that it is more administratively feasible to rely on States, rather than the federal government, to manage the transfer of funds to smaller local governments. Consistent with the needs of all local governments for funding to address the public health emergency, States should transfer funds to local governments with populations of 500,000 or less, using as a benchmark the per capita allocation formula that governs payments to larger local governments. This approach will ensure equitable treatment among local governments of all sizes.? Pursuant to the directive from the federal government, Georgia used a per capita formula to determine allocations to local governments based on U.S. Census population estimates for Georgia cities and counties. While 20 percent of funds were disbursed to local governments on an advance basis, OPB required detailed documentation of eligible expense before releasing any additional funds on a reimbursement only basis. Where sufficient documentation was not provided, OPB has issued recoupment notices to those entities. All expenses were reviewed via a two-level review process. Based on the federal government?s directive to release funds to local governments and requirement of those local entities to provide specific documentation of all allowable expenses, OPB found the level of risk associated with reimbursing local governments for COVID-19 related expenses to be minimal. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the OPB due to the effects of the COVID-19 pandemic and the urgency with which CRF funding was provided to various organizations across Georgia. CRF funds totaling $409.2 million were reported on the SEFA by OPB as being passed through to subrecipients, and the subrecipient organizations associated with these pass-through funds were tested by auditors. While the OPB implemented various internal controls to monitor the spending of these subrecipients, there are specific procedures that must be completed and documented to comply with subrecipient monitoring requirements, and these requirements, which are reflected in the ?Criteria? and ?Condition? above, were not met. Additionally, the OPB is required to implement internal controls to address applicable compliance requirements, and no such internal controls were implemented for these subrecipient monitoring requirements. We reaffirm our finding and will review the status of the OPB?s corrective action during our next audit.
Show full finding ▾Hide full finding ▴FEDERAL AGENCY: U.S. DEPARTMENT OF THE TREASURY (continued) STATE ENTITY: OFFICE OF THE GOVERNOR (continued) 2021-041 Improve Controls over Subrecipient Monitoring Compliance Requirement: Subrecipient Monitoring Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Treasury Pass-Through Entity: None AL Number and Title: COVID-19 ? 20.019 ? Coronavirus Relief Fund Federal Award Number: None Provided (Year:2020) Questioned Costs: None Identified Description: The Governor?s Office of Planning and Budget should improve internal controls to ensure that required risk assessments for subrecipients are performed appropriately. Background Information: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for State, Local, and Tribal governments navigating the impact of the COVID-19 outbreak. Title VI, Section 601 of the CARES Act appropriated $150 billion to States, Tribal governments and units of local government through the establishment of the Coronavirus Relief Fund (CRF). Of this funding, the State of Georgia received $3.5 billion. The Governor?s Office of Planning and Budget (OPB) was designated as the custodian of the CRF funds for the State of Georgia and was charged with subawarding funds to local governments and non-governmental organizations, reviewing and approving expenditures, and disbursing reimbursements for this expenditure activity. CRF funds totaling $409.2 million were expended and reported on the State of Georgia?s Schedule of Expenditures of Federal Awards (SEFA) as being passed through to subrecipients, including cities, counties, and not-for-profit and for-profit organizations, for fiscal year 2021. Criteria: As a recipient of federal awards, the OPB is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.331 establish requirements for pass-through entities and state in part that ?All pass-through entities must? (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring?, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F?Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency)? (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through monitoring of the subrecipient must include? (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass0throguh entity? (f) Verify that every subrecipient is audited as required by Subpart F ? Audit Requirements of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth? (g) Consider whether the results of the subrecipient?s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement against noncompliant subrecipients.? Condition: The OPB did not comply with pass-through entity requirements associated with subrecipients during the period under review. The OPB was unable to locate any evidence that required risk assessments, which reflected the OPB?s evaluation of the risk of noncompliance with federal regulations and the terms and conditions of the subaward, were performed for subrecipients of the CRF program. Additionally, the OPB did not verify that audits of subrecipients were conducted for those expending $750,000 or more in federal funds. Further, the results of these audits were not considered in the risk assessment process and followed-up on to ensure that the subrecipients took appropriate and timely action to correct any deficiencies noted in the audits. Cause: The OPB has no policies or procedures in place to address how risk assessments of subrecipients should be performed and documented. Additionally, the OPB has no policies and procedures in place to ensure subrecipients were audited and that results of the audit are reviewed so that prompt and meaningful management decisions can be issued in accordance with federal requirements. The OPB management were unaware of all the oversight responsibilities of pass-through entities under the Uniform Guidance and believed they were meeting the requirements through their established process of reviewing all expense reimbursement requests. Effect: The subrecipient monitoring deficiencies resulted in noncompliance with federal regulations. Without effective subrecipient monitoring controls in place to ensure compliance with all applicable federal requirements, there is an increased risk of federal funds being expended for unallowable purposes, subrecipients not properly administering federal programs in accordance with federal statutes, regulations, and the terms and conditions of the subawards, and untimely detection and correction of noncompliance. Recommendation: We recommend that the OPB: ? Ensure the required risk assessments are performed and documented, which would allow management to evaluate the results and demonstrate compliance with federal requirements; ? Utilize the results of risk assessments to determine how much and what type of monitoring of subrecipients will be performed to ensure proper accountability and compliance with program requirements; and ? Establish adequate internal controls, including policies and procedures, to ensure that subrecipients receive audits when necessary, the results of these audits are considered in the risk assessment process, and timely management decisions are made for any audit findings pertaining to federal awards. Views of Responsible Officials: We do not concur with this finding. OPB disagrees with the finding that there were insufficient internal controls regarding subrecipient risk assessment and monitoring. Coronavirus Relief Funds (CRF) were provided to other state agencies, local governments, and licensed long-term care facilities as emergency financial relief to reimburse these entities for direct disaster response costs. Unlike other traditional federal programs, entities did not apply to OPB to be awarded funds to implement a grant program. Instead, the state used the relief funds to cover already incurred expenses related to the pandemic for pre-selected entities that were hardest hit and directly responding to the national disaster. Pursuant to Uniform Guidance, Section 200.331, in reviewing these recipients experience with the same or similar subawards, there was no precedence for such previous pandemic emergency response spending for these entities. In selecting nursing home subrecipients, OPB worked with the Department of Community Health to create a list of licensed long-term care facilities under federal mandate to test employees for COVID-19. All facilities were already reviewed and licensed by the state, which includes an affidavit of financial stability from a certified public accountant for assisted living facilities and personal care homes. Long term care facilities are also, with very limited exceptions of private pay only facilities, certified by the Centers for Medicaid and Medicare Services (CMS) as providers and must comply with federal regulations and oversight to maintain that certification. Finally, in evaluating and mitigating risk with subrecipients, no funds were advanced to any facilities and use of funds was limited to reimbursement of COVID-19 testing of employees only. Funds were disbursed on a reimbursement only basis upon review of documentation of expense. Facilities were required to provide invoices and documentation of all expenses prior to the release of funds, and all expense requests underwent a two-level review process within OPB prior to approval. Based on the pre-selection review and licensure by both federal and state entities coupled with OPB?s multi-level review of all documentation of expense prior to the release of funds, OPB found that there should be minimal risk of fraud in disbursing funds to long-term care facilities. With regards to Single Audit requirements, for-profit entities do not have a federal requirement under 2 CFR 200; however, all long-term care facilities were required to sign a terms and conditions document with OPB establishing requirements for the funds and compliance with applicable federal laws. Additionally, transfers to local governments were done pursuant to direction from the U.S. Treasury that states were responsible for any such disbursements to local governments not directly receiving CRF from Treasury. Specifically, U.S. Treasury guidance in FAQ 33, states ?This statutory structure was based on a recognition that it is more administratively feasible to rely on States, rather than the federal government, to manage the transfer of funds to smaller local governments. Consistent with the needs of all local governments for funding to address the public health emergency, States should transfer funds to local governments with populations of 500,000 or less, using as a benchmark the per capita allocation formula that governs payments to larger local governments. This approach will ensure equitable treatment among local governments of all sizes.? Pursuant to the directive from the federal government, Georgia used a per capita formula to determine allocations to local governments based on U.S. Census population estimates for Georgia cities and counties. While 20 percent of funds were disbursed to local governments on an advance basis, OPB required detailed documentation of eligible expense before releasing any additional funds on a reimbursement only basis. Where sufficient documentation was not provided, OPB has issued recoupment notices to those entities. All expenses were reviewed via a two-level review process. Based on the federal government?s directive to release funds to local governments and requirement of those local entities to provide specific documentation of all allowable expenses, OPB found the level of risk associated with reimbursing local governments for COVID-19 related expenses to be minimal. Auditor's Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the OPB due to the effects of the COVID-19 pandemic and the urgency with which CRF funding was provided to various organizations across Georgia. CRF funds totaling $409.2 million were reported on the SEFA by OPB as being passed through to subrecipients, and the subrecipient organizations associated with these pass-through funds were tested by auditors. While the OPB implemented various internal controls to monitor the spending of these subrecipients, there are specific procedures that must be completed and documented to comply with subrecipient monitoring requirements, and these requirements, which are reflected in the ?Criteria? and ?Condition? above, were not met. Additionally, the OPB is required to implement internal controls to address applicable compliance requirements, and no such internal controls were implemented for these subrecipient monitoring requirements. We reaffirm our finding and will review the status of the OPB?s corrective action during our next audit.
2021-041 Improve Controls over Subrecipient Monitoring Federal Agency: U.S. Department of the Treasury State Entity: Office of the Governor (OPB) OPB will improve documentation of risk assessment and audit review. During Fiscal Year 2021 and into Fiscal Year 2022, as additional subsequent federal covid assistance was authorized and received, OPB has established a dedicated grants management division, developed written grant guidance, policies, and procedures, and established a subrecipient risk assessment and ongoing monitoring program in coordination with an external audit partner. The audit review program will utilize a risk assessment matrix based on program type, verify grantee?s most recent Single Audit, reviewing relevant findings if any, perform desk audits and/or site visits as needed based on an awardee?s risk assessment, and perform follow-up risk evaluations for any pre-qualified recipients participating in programs spanning multiple grant years.
FAC accepted this audit on September 9, 2021 — management decision was due March 9, 2022.
A sample of 40 students from a population of 3,324 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? One student received Subsidized Federal Direct Student Loans in excess of their calculated financial need. This resulted in an over disbursement of $237.00. ? One student received Federal Direct Student Loans in excess of the aggregate loan limit. This resulted in an over disbursement of $496.00. ? One student received additional funds from outside sources that were not included in the other resources available to the student in the calculation of need. ? One student was awarded more financial aid than their cost of attendance budget. ? Two students were eligible to receive $1,543.00 more in Federal Pell Grant Program funds than they actually received based upon their enrollment status and Expected Family Contribution. ? One student received $607.00 more in Federal Pell Grant Program funds than they were eligible to receive based upon their enrollment status and Expected Family Contribution. This resulted in an over disbursement of $607.00. ? Two students were not in compliance with the Institution?s published Satisfactory Academic Progress (SAP) policies. The students did not meet the quantitative requirement of SAP, which resulted in over disbursements totaling $8,294.00. ? Transfer monitoring was not completed properly for three students. ? Information from the U.S. Department of Education?s Common Origination and Disbursement website was not provided for review for two students and did not agree to the information reflected in the student information system for one student. ? Appropriate notifications of disbursements, rights to cancel loans, and/or procedures for canceling loans were not made appropriately to any students tested. Questioned Costs: Upon testing a sample of $435,360.00 in financial aid disbursements, known questioned costs of $9,634.00 were identified for the students who received student financial assistance in excess of their eligibility. Using the total population amount of $39,903,047.67, we project the likely questioned costs to be approximately $883,007.08. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that the Institution has had difficulty finding a qualified Financial Aid director since the previous Financial Aid director vacated the position in October 2019. The lack of office leadership and the reduced number staff led to human errors and the review of certain reports to be overlooked. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with Federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. Furthermore, the Institution should ensure that an adequate number of financial aid staff with the appropriate level of training and expertise is employed at all times. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-013 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.038 ? Federal Perkins Loan Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A191039 (Year: 2020), P033A191039 (Year: 2020), P038A181039 (Year: 2019), P063P190091 (Year: 2020), P268K200091 (Year: 2020) Questioned Costs: $9,634.00 The Institution?s Student Financial Aid Office improperly determined the Student Financial Assistance (SFA) award amounts for eligible students. Criteria: Provisions included in 34 CFR 668 provide general provisions for administering SFA programs and 34 CFR 674, 675, 676, 685, and 690 provide eligibility and other related program requirements that are specific to the Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grant (FSEOG) Program, Federal Direct Student Loans Program, and Federal Pell Grant Program, respectively. Condition: A sample of 40 students from a population of 3,324 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? One student received Subsidized Federal Direct Student Loans in excess of their calculated financial need. This resulted in an over disbursement of $237.00. ? One student received Federal Direct Student Loans in excess of the aggregate loan limit. This resulted in an over disbursement of $496.00. ? One student received additional funds from outside sources that were not included in the other resources available to the student in the calculation of need. ? One student was awarded more financial aid than their cost of attendance budget. ? Two students were eligible to receive $1,543.00 more in Federal Pell Grant Program funds than they actually received based upon their enrollment status and Expected Family Contribution. ? One student received $607.00 more in Federal Pell Grant Program funds than they were eligible to receive based upon their enrollment status and Expected Family Contribution. This resulted in an over disbursement of $607.00. ? Two students were not in compliance with the Institution?s published Satisfactory Academic Progress (SAP) policies. The students did not meet the quantitative requirement of SAP, which resulted in over disbursements totaling $8,294.00. ? Transfer monitoring was not completed properly for three students. ? Information from the U.S. Department of Education?s Common Origination and Disbursement website was not provided for review for two students and did not agree to the information reflected in the student information system for one student. ? Appropriate notifications of disbursements, rights to cancel loans, and/or procedures for canceling loans were not made appropriately to any students tested. Questioned Costs: Upon testing a sample of $435,360.00 in financial aid disbursements, known questioned costs of $9,634.00 were identified for the students who received student financial assistance in excess of their eligibility. Using the total population amount of $39,903,047.67, we project the likely questioned costs to be approximately $883,007.08. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that the Institution has had difficulty finding a qualified Financial Aid director since the previous Financial Aid director vacated the position in October 2019. The lack of office leadership and the reduced number staff led to human errors and the review of certain reports to be overlooked. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with Federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. Furthermore, the Institution should ensure that an adequate number of financial aid staff with the appropriate level of training and expertise is employed at all times. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2020-013 Improve Controls Over the Awarding Process Federal Agency: U.S. Department of Education State Entity: Savannah State University Corrective Action Plans: The institution is working to fill vacant positions with trained financial aid professionals. The Financial Aid Office, in conjunction with the Registrar and Bursar Offices, will review processes and set-ups in BANNER as well as awarding procedures. This will ensure that awards will be accurate, over awards are monitored and aid is adjusted appropriately, and timely and disbursement notices are being sent. The transfer monitoring process will be completed in BANNER so that compliance requirements can be met. The SAP Policy and Procedures, as well as the set ups in BANNER will be reviewed and updated to ensure students statuses are calculated accurately. Estimated Completion Date: July 1, 2021 Contact Person: Raymond Clarke, Vice President of Enrollment Management Telephone: (912) 358-4338; E-mail: clarker@savannahstate.edu
A review of the Institution?s COA budgets was performed to determine if the budgets were reasonable, included allowable components, and were calculated based upon appropriate supporting documentation. Institution personnel could not provide supporting documentation or explanations for the calculation of the following components included in the COA budgets: Books and Supplies, Personal Expenses, Room, Board, Tuition, Fees, and Transportation. Questioned Costs: Though questioned costs may exist, these amounts are unknown. Auditor was able to determine that the amounts reflected for several components of the COA budgets were acceptable based upon a review of the published tuition, fees, room, and board rates approved by the University System of Georgia. However, the reasonableness of the amounts reflected for Books and Supplies, Personal Expenses, and Transportation could not be determined. The following CFDA numbers would be affected if questioned costs did exist: 84.007, 84.033, 84.038, 84.063, 84.268. Cause: In discussing these deficiencies with management, they stated that the previous Financial Aid Director who vacated the position in October 2019 established the COA budgets, and the documentation supporting the COA budgets could not be located for review. Effect: The Institution was not in compliance with Federal regulations concerning the COA budgets used as the basis for determining SFA eligibility. The COA budget is the cornerstone of establishing a student?s financial need and sets a limit on the total aid a student may receive. If the estimated costs used for components within the COA budgets are unreasonable and do not represent average costs for students at the Institution, a majority of the student population may have been over or under awarded. Recommendation: The Institution should reevaluate the components used in the COA budgets and document that these costs represent average costs for students enrolled at the Institution. The Institution should modify its procedures to ensure that any future changes to the COA budgets are reasonable and based on documented average costs for students. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-014 Strengthen Controls over Cost of Attendance Budgets Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.038 ? Federal Perkins Loan Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A191039 (Year: 2020), P033A191039 (Year: 2020), P038A181039 (Year: 2019), P063P190091 (Year: 2020), P268K200091 (Year: 2020) Questioned Costs: Unknown The Institution?s Student Financial Aid Office did not appropriately document the procedures used to establish Cost of Attendance (COA) budgets. Criteria: Provisions included in 34 CFR 668 provide general provisions for administering Student Financial Assistance (SFA) programs. In addition, Section 472 of the Higher Education Act of 1965 specifies the components that can be included in COA budgets. Condition: A review of the Institution?s COA budgets was performed to determine if the budgets were reasonable, included allowable components, and were calculated based upon appropriate supporting documentation. Institution personnel could not provide supporting documentation or explanations for the calculation of the following components included in the COA budgets: Books and Supplies, Personal Expenses, Room, Board, Tuition, Fees, and Transportation. Questioned Costs: Though questioned costs may exist, these amounts are unknown. Auditor was able to determine that the amounts reflected for several components of the COA budgets were acceptable based upon a review of the published tuition, fees, room, and board rates approved by the University System of Georgia. However, the reasonableness of the amounts reflected for Books and Supplies, Personal Expenses, and Transportation could not be determined. The following CFDA numbers would be affected if questioned costs did exist: 84.007, 84.033, 84.038, 84.063, 84.268. Cause: In discussing these deficiencies with management, they stated that the previous Financial Aid Director who vacated the position in October 2019 established the COA budgets, and the documentation supporting the COA budgets could not be located for review. Effect: The Institution was not in compliance with Federal regulations concerning the COA budgets used as the basis for determining SFA eligibility. The COA budget is the cornerstone of establishing a student?s financial need and sets a limit on the total aid a student may receive. If the estimated costs used for components within the COA budgets are unreasonable and do not represent average costs for students at the Institution, a majority of the student population may have been over or under awarded. Recommendation: The Institution should reevaluate the components used in the COA budgets and document that these costs represent average costs for students enrolled at the Institution. The Institution should modify its procedures to ensure that any future changes to the COA budgets are reasonable and based on documented average costs for students. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2020-014 Strengthen Controls over Cost of Attendance Budgets Federal Agency: U.S. Department of Education State Entity: Savannah State University Corrective Action Plans: The cost of attendance budgets are being reviewed and documented appropriately by the financial aid office and will be stored in a shared file so that it may be accessed and provided even if the person who documented it is no longer employed by the university. Estimated Completion Date: July 1, 2021 Contact Person: Raymond Clarke, Vice President of Enrollment Management Telephone: (912) 358-4338; E-mail: clarker@savannahstate.edu
All amounts reflected on the Award Year July 1, 2018 through June 30, 2019 FISAP report were not accurately completed and supported by the accounting records or other appropriate documentation. Amounts reported by the Institution within the following categories could not be supported by institutional records and reports: Information on Enrollment, Tuition and Fees for Undergraduate Students, State Grants and Scholarships, Federal Supplemental Educational Opportunity Grant (FSEOG) Program, Federal Work-Study (FWS) Program, and Distribution of Program Recipients and Expenditures by Type of Student. Cause: In discussing these deficiencies with management, they stated that documentation supporting the FISAP could not be located due to staff turnover. Effect: If incorrect amounts are reported on the FISAP report for the FSEOG and FWS programs, authorizations in subsequent award years may be reduced and result in less funding received by the Institution. Furthermore, students may not have access to an adequate level of student financial assistance. Additionally, the Institution was not in compliance with Federal regulations concerning special reporting requirements. Recommendation: The Institution should implement policies and procedures to ensure that all reports submitted to the U.S. Department of Education are accurately completed and supported by the accounting records. Management should also develop and implement a monitoring process to ensure that controls are operating properly. Additionally, the Institution should also contact the U.S. Department of Education regarding the resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-015 Improve Controls over Special Reporting Compliance Requirement: Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.038 ? Federal Perkins Loan Program Federal Award Number: P007A191039 (Year: 2020), P033A191039 (Year: 2020), P038A181039 (Year: 2019) Questioned Costs: None Identified Amounts reported on the Fiscal Operations and Application to Participate (FISAP) report were not properly supported by or reconciled to appropriate documentation. Criteria: Provisions included in 34 CFR 675.19(b)(3) state, ?Each year an institution shall submit a Fiscal Operations Report plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary.? Additionally, provisions included in 34 CFR 668.24(e)(1) state in part that ?an institution shall keep ? (i) The Fiscal Operations Report and Application to Participate in the Federal Perkins Loan, FSEOG, and FWS Programs (FISAP), and any records necessary to support the data contained in the FISAP, including ?income grid information,? for three years after the end of the award year in which the FISAP is submitted.? Condition: All amounts reflected on the Award Year July 1, 2018 through June 30, 2019 FISAP report were not accurately completed and supported by the accounting records or other appropriate documentation. Amounts reported by the Institution within the following categories could not be supported by institutional records and reports: Information on Enrollment, Tuition and Fees for Undergraduate Students, State Grants and Scholarships, Federal Supplemental Educational Opportunity Grant (FSEOG) Program, Federal Work-Study (FWS) Program, and Distribution of Program Recipients and Expenditures by Type of Student. Cause: In discussing these deficiencies with management, they stated that documentation supporting the FISAP could not be located due to staff turnover. Effect: If incorrect amounts are reported on the FISAP report for the FSEOG and FWS programs, authorizations in subsequent award years may be reduced and result in less funding received by the Institution. Furthermore, students may not have access to an adequate level of student financial assistance. Additionally, the Institution was not in compliance with Federal regulations concerning special reporting requirements. Recommendation: The Institution should implement policies and procedures to ensure that all reports submitted to the U.S. Department of Education are accurately completed and supported by the accounting records. Management should also develop and implement a monitoring process to ensure that controls are operating properly. Additionally, the Institution should also contact the U.S. Department of Education regarding the resolution of this finding. Views of Responsible Officials: We concur with this finding.
2020-015 Improve Controls over Special Reporting Federal Agency: U.S. Department of Education State Entity: Savannah State University Corrective Action Plans: When completing future FISAP's, the documentation for the information will be compiled by the appropriate offices and stored in a central location so the information will be available for review. Estimated Completion Date: July 1, 2021 Contact Person: Raymond Clarke, Vice President of Enrollment Management Telephone: (912) 358-4338; E-mail: clarker@savannahstate.edu
A sample of 40 students from a population of 1,125 students who were selected for verification by the U.S. Department of Education was randomly selected for testing using a non-statistical sampling method. Verification records were reviewed to ensure that the Institution obtained acceptable verification documentation, matched documentation obtained to the student aid application, submitted appropriate corrections when necessary, and reported the correct verification status to the Common Origination and Disbursement (COD) system. The following deficiencies were identified: ? The tax return documentation provided for one student did not agree to their most recent Institutional Student Information Report (ISIR). ? Verification procedures were not completed for one student. ? For one student, documentation from the COD system was not provided for review. Questioned Costs: Upon testing a sample of $500,289.00 in financial aid disbursements to students who were selected for verification, known questioned costs of $21,240.00 were identified for the student for whom verification procedures were not completed appropriately but received student financial assistance. Using the total population amount of $13,227,395.00, we project the likely questioned costs to be approximately $566,334.26. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that staff turnover led to processing errors by the new and remaining staff. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The excess funds disbursed to students for whom verification procedures have not been completed appropriately must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning performing verification procedures and awarding of SFA funds to students. Recommendation: The Institution should develop and implement procedures to ensure that verification requirements are met and appropriate documentation is maintained on file. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-016 Strengthen Controls over the Verification Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.038 ? Federal Perkins Loan Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A191039 (Year: 2020), P033A191039 (Year: 2020), P038A181039 (Year: 2019), P063P190091 (Year: 2020), P268K200091 (Year: 2020) Questioned Costs: $21,420.00 The Institution?s Student Financial Aid Office did not meet student verification requirements appropriately. Criteria: Provisions included in 34 CFR 668 provide the compliance requirements for the verification process that the Institution should follow for students who receive financial aid and identify what documentation is acceptable. Condition: A sample of 40 students from a population of 1,125 students who were selected for verification by the U.S. Department of Education was randomly selected for testing using a non-statistical sampling method. Verification records were reviewed to ensure that the Institution obtained acceptable verification documentation, matched documentation obtained to the student aid application, submitted appropriate corrections when necessary, and reported the correct verification status to the Common Origination and Disbursement (COD) system. The following deficiencies were identified: ? The tax return documentation provided for one student did not agree to their most recent Institutional Student Information Report (ISIR). ? Verification procedures were not completed for one student. ? For one student, documentation from the COD system was not provided for review. Questioned Costs: Upon testing a sample of $500,289.00 in financial aid disbursements to students who were selected for verification, known questioned costs of $21,240.00 were identified for the student for whom verification procedures were not completed appropriately but received student financial assistance. Using the total population amount of $13,227,395.00, we project the likely questioned costs to be approximately $566,334.26. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that staff turnover led to processing errors by the new and remaining staff. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The excess funds disbursed to students for whom verification procedures have not been completed appropriately must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning performing verification procedures and awarding of SFA funds to students. Recommendation: The Institution should develop and implement procedures to ensure that verification requirements are met and appropriate documentation is maintained on file. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2020-016 Strengthen Controls over Verification Process Federal Agency: U.S. Department of Education State Entity: Savannah State University Corrective Action Plans: The institution will provide additional training opportunities for staff completing verification in order to ensure that they are completed accurately. Additionally, staff will perform random self-audits of completed files to further ensure accuracy and identify training opportunities. Estimated Completion Date: July 1, 2021 Contact Person: Raymond Clarke, Vice President of Enrollment Management Telephone: (912) 358-4338; E-mail: clarker@savannahstate.edu
A sample of 33 students from a population of 163 students who received student financial assistance (SFA) for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution was randomly selected for testing using a non-statistical sampling method. The students? Return of Title IV calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agencies and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for six students who withdrew during the Fall 2019 semester and two students who withdrew during the Spring 2020 semester could not be provided for review. Therefore, it could not be determined if these calculations were performed or accurate. As a result, refunds in the amount of $15,704.29 were not supported with adequate documentation at the time of the audit. ? The refund calculations for five students who withdrew during the Fall 2019 semester and one student who withdrew during the Spring 2020 semester were calculated incorrectly due to the use of improper scheduled break days, withdrawal dates, and/or institutional charges. Of the Fall 2019 refunds, four students were requested to return $1,800.54 less than the required amount to various SFA programs, and one student was requested to return $1,673.86 more than the required amount to various SFA programs. Spring 2020 refunds were not required to be returned to the various SFA programs due to a waiver provided by the U.S. Department of Education. ? The proration between the school and student portion of the refund was incorrect for nine students who withdrew during the Fall 2019 semester and three students who withdrew during the Spring 2020 semester. ? The amount returned within the student information system did not agree to the Institution?s calculation for one student. ? Funds were not returned to the appropriate grantor programs within the required time frame for 13 of the withdrawn students tested. In addition, a sample of 27 students from a population of 130 students who received Federal financial assistance for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution but for whom no Return of Title IV calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that refund calculations were not performed appropriately for seven students who withdrew during the Spring 2020 semester. Questioned Costs: Upon testing a sample of $201,110.03 in financial aid disbursements to students for whom a Return of Title IV calculation was completed, known questioned costs of $17,260.07 were identified for refunds not adequately supported or calculated incorrectly. Using the total population amount of $1,019,228.67, we project the likely questioned costs to be approximately $87,474.30. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that staff turnover and lack of knowledge of the available staff led to a failure in performing Return of Title IV calculations appropriately and timely. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The school?s portion of the refunds that were not calculated or were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, improperly identifying withdrawn students, not performing Return of Title IV calculations, and/or not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should revise and implement procedures to ensure that students who withdrew from the Institution are identified, student financial aid refunds are properly calculated, and that unearned funds are correctly returned to the appropriate accounts in a timely manner in accordance with the Higher Education Amendments 1998, Public Law 105-244. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should also contact the U.S. Department of Education regarding resolution of the finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-017 Improve Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.038 ? Federal Perkins Loan Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P007A191039 (Year: 2020), P033A191039 (Year: 2020), P038A181039 (Year: 2019), P063P190091 (Year: 2020), P268K200091 (Year: 2020) Questioned Costs: $17,260.07 Repeat of Prior Year Findings: FA 2016-001, FA 2015-003, FA-548-14-02 The Institution did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Criteria: Provisions included in 34 CFR 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The Institution is required to determine the amount of Title IV funds that the student earned as of the student?s withdrawal date when a recipient of Title IV funds withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Condition: A sample of 33 students from a population of 163 students who received student financial assistance (SFA) for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution was randomly selected for testing using a non-statistical sampling method. The students? Return of Title IV calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agencies and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for six students who withdrew during the Fall 2019 semester and two students who withdrew during the Spring 2020 semester could not be provided for review. Therefore, it could not be determined if these calculations were performed or accurate. As a result, refunds in the amount of $15,704.29 were not supported with adequate documentation at the time of the audit. ? The refund calculations for five students who withdrew during the Fall 2019 semester and one student who withdrew during the Spring 2020 semester were calculated incorrectly due to the use of improper scheduled break days, withdrawal dates, and/or institutional charges. Of the Fall 2019 refunds, four students were requested to return $1,800.54 less than the required amount to various SFA programs, and one student was requested to return $1,673.86 more than the required amount to various SFA programs. Spring 2020 refunds were not required to be returned to the various SFA programs due to a waiver provided by the U.S. Department of Education. ? The proration between the school and student portion of the refund was incorrect for nine students who withdrew during the Fall 2019 semester and three students who withdrew during the Spring 2020 semester. ? The amount returned within the student information system did not agree to the Institution?s calculation for one student. ? Funds were not returned to the appropriate grantor programs within the required time frame for 13 of the withdrawn students tested. In addition, a sample of 27 students from a population of 130 students who received Federal financial assistance for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution but for whom no Return of Title IV calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that refund calculations were not performed appropriately for seven students who withdrew during the Spring 2020 semester. Questioned Costs: Upon testing a sample of $201,110.03 in financial aid disbursements to students for whom a Return of Title IV calculation was completed, known questioned costs of $17,260.07 were identified for refunds not adequately supported or calculated incorrectly. Using the total population amount of $1,019,228.67, we project the likely questioned costs to be approximately $87,474.30. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that staff turnover and lack of knowledge of the available staff led to a failure in performing Return of Title IV calculations appropriately and timely. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The school?s portion of the refunds that were not calculated or were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, improperly identifying withdrawn students, not performing Return of Title IV calculations, and/or not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should revise and implement procedures to ensure that students who withdrew from the Institution are identified, student financial aid refunds are properly calculated, and that unearned funds are correctly returned to the appropriate accounts in a timely manner in accordance with the Higher Education Amendments 1998, Public Law 105-244. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should also contact the U.S. Department of Education regarding resolution of the finding. Views of Responsible Officials: We concur with this finding.
2020-017 Improve Controls over the Return of Title IV Funds Process Federal Agency: U.S. Department of Education State Entity: Savannah State University Corrective Action Plans: The Financial Aid Office, the Bursar Office and the Registrar Office will review processes and set ups in BANNER to ensure that R2T4 calculations are being completed accurately and timely for both official and unofficial withdrawals. Additionally, staff will receive additional training and the withdrawal policies will be reviewed and updated as necessary to meet federal regulations. Estimated Completion Date: July 1, 2021 Contact Person: Raymond Clarke, Vice President of Enrollment Management Telephone: (912) 358-4338; E-mail: clarker@savannahstate.edu
A sample of 25 students who received Federal Pell Grant Program and/or Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For one student, the OPEID Number reflected on the Campus-Level and Program-Level Record did not agree to the location that the student was actually attending. ? For 20 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 13 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For 7 students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For four students, the Classification of Instructional Programs Code reflected on the Program-Level Record did not agree with the students? field of study reported in the student information system. ? For two students, the Credential Level reflected on the Program-Level Record did not agree to the level of credential that the students would receive for the program the student was attending. ? For two students, the Published Program Length Measurement and/or Published Program Length reflected on the Program-Level Record was not appropriate based upon review of the Institution?s catalog. ? For two students, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. In addition, the Enrollment Reporting Summary Report (SCHER1) was not provided for review. Therefore, it could not be determined if the Institution updated and returned Enrollment Reporting roster files within the appropriate timeframes. Cause: In discussing these deficiencies with management, they stated that there was not adequate communication between the Financial Aid Office and the Registrar?s Office to ensure that accurate enrollment reporting occurred. Additionally, issues noted with identifying withdrawn students contributed to errors in enrollment reporting. Effect: If enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Additionally, the Institution was not in compliance with Federal regulations concerning enrollment reporting requirements. Recommendation: The Institution should implement policies and procedures to ensure that all changes in student enrollment statuses are reported in a timely manner. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-018 Strengthen Controls over Enrollment Reporting Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Federal Award Number: P063P190091 (Year: 2020), P268K200091 (Year: 2020) Questioned Costs: None Identified Changes in student enrollment statuses were not reported to required organizations in a timely and accurate manner. Criteria: Regarding the enrollment reporting process, provisions included in 34 CFR 685.309(b) state in part ?(1) Upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return the report to the Secretary ? (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe prescribed by the Secretary. (2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that ? (i) ? the student has ceased to be enrolled on at least a half-time basis for the period.? In addition, per the National Student Loan Data System (NSLDS) Enrollment Reporting Guide issued by the U.S. Department of Education, students who have received Federal Pell Grant funds will be included on the NSLDS roster file received by each institution and are subject to the same enrollment reporting requirements as those students who have received a loan under the William D. Ford Federal Direct Loan Program. Condition: A sample of 25 students who received Federal Pell Grant Program and/or Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For one student, the OPEID Number reflected on the Campus-Level and Program-Level Record did not agree to the location that the student was actually attending. ? For 20 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 13 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For 7 students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For four students, the Classification of Instructional Programs Code reflected on the Program-Level Record did not agree with the students? field of study reported in the student information system. ? For two students, the Credential Level reflected on the Program-Level Record did not agree to the level of credential that the students would receive for the program the student was attending. ? For two students, the Published Program Length Measurement and/or Published Program Length reflected on the Program-Level Record was not appropriate based upon review of the Institution?s catalog. ? For two students, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. In addition, the Enrollment Reporting Summary Report (SCHER1) was not provided for review. Therefore, it could not be determined if the Institution updated and returned Enrollment Reporting roster files within the appropriate timeframes. Cause: In discussing these deficiencies with management, they stated that there was not adequate communication between the Financial Aid Office and the Registrar?s Office to ensure that accurate enrollment reporting occurred. Additionally, issues noted with identifying withdrawn students contributed to errors in enrollment reporting. Effect: If enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Additionally, the Institution was not in compliance with Federal regulations concerning enrollment reporting requirements. Recommendation: The Institution should implement policies and procedures to ensure that all changes in student enrollment statuses are reported in a timely manner. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2020-018 Strengthen Controls over Enrollment Reporting Federal Agency: U.S. Department of Education State Entity: Savannah State University Corrective Action Plans: The Financial Aid Office and the Registrar?s Office will work on the policy and processes related to students who withdraw, change programs or change enrollment status to ensure that these updates are processed timely and correctly. Estimated Completion Date: July 1, 2021 Contact Person: Raymond Clarke, Vice President of Enrollment Management Telephone: (912) 358-4338; E-mail: clarker@savannahstate.edu
A sample of 25 students from a population of 8,446 students who received $5,860,241.09 in student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? Two students received Unsubsidized Federal Direct Student Loans before the Subsidized need-based loan limit was reached. ? The appropriate notification of the disbursement of Federal Direct Student Loans did not occur for two students. ? One student was not registered with the Selective Service appropriately and received financial aid funds for which they were not eligible. Over disbursements totaling $21,988.00 were noted. Questioned Costs: Upon testing the population of students who received financial aid during the 2019 ? 2020 award year and for whom a Selective Service System match error was reflected on their Institutional Student Information Record, known questioned costs of $33,690 were identified for the three students who received student financial assistance in excess of their eligibility. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated the Selective Service System verification requirement was improperly removed within the student information system due to a configuration issue and led to the awarding of aid to ineligible students. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with Federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-019 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans 84.379 ? Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) Federal Award Number: P007A191055 (Year: 2020), P033A191055 (Year: 2020), P063P190093 (Year: 2020), P268K200093 (Year: 2020), P379T200093 (Year: 2020) Questioned Costs: $33,690.00 The Institution?s Student Financial Aid Office improperly determined the Student Financial Assistance (SFA) award amounts for eligible students. Criteria: Provisions included in 34 CFR 668 provide general provisions for administering SFA programs and 34 CFR 675, 676, 685, 686, and 690 provide eligibility and other related program requirements that are specific to the Federal Work-Study Program, Federal Supplemental Educational Opportunity Grant (FSEOG) Program, Federal Direct Student Loans Program, Teacher Education Assistance for College and Higher Education (TEACH) Grants, and Federal Pell Grant Program, respectively. Condition: A sample of 25 students from a population of 8,446 students who received $5,860,241.09 in student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? Two students received Unsubsidized Federal Direct Student Loans before the Subsidized need-based loan limit was reached. ? The appropriate notification of the disbursement of Federal Direct Student Loans did not occur for two students. ? One student was not registered with the Selective Service appropriately and received financial aid funds for which they were not eligible. Over disbursements totaling $21,988.00 were noted. Questioned Costs: Upon testing the population of students who received financial aid during the 2019 ? 2020 award year and for whom a Selective Service System match error was reflected on their Institutional Student Information Record, known questioned costs of $33,690 were identified for the three students who received student financial assistance in excess of their eligibility. The following CFDA numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated the Selective Service System verification requirement was improperly removed within the student information system due to a configuration issue and led to the awarding of aid to ineligible students. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with Federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2020-019 Improve Controls over the Awarding Process Federal Agency: U.S. Department of Education State Entity: Valdosta State University Corrective Action Plans: The improper award identified was due to a flawed procedure, implemented for Fall Semester 2019. The procedure was designed to allow the use of the Campus Logic?s VerifyMyFAFSA.com document and form collection system to collect the required proof of registration with the Selective Service so that they could more easily be submitted remotely. Staff members were correctly manually posting the additional ?Verify? requirement in Banner that should have prevented awarding of funds until the requirement was satisfied in Campus Logic and then acted as the interface between the two systems. Unfortunately, they were not aware that because they were not locking the updated records, the ?Verify? requirements was later being inadvertently removed by the Banner automated requirement tracking process allowing awarding. To resolve this issue, a change has been made to the Banner automated requirement tracking process so that the process will now post the additional ?Verify? requirement to all Banner records with Selective Service Comment Codes requiring resolution. This change will preclude the need for staff to manually post the requirement, prevent the ?Verify? code from inadvertently being removed and ensure that the requirement is always present to prevent awarding until the necessary proof of registration is received in Campus Logic VerifyMyFAFSA.com system and review by a staff member. The procedure will be monitored for the remainder of the 2020-2021 academic year to ensure that the change prevents additional improper awards from being made. Going forward, a quarterly review of Selective Service Comment Code students will be conducted to ensure that the issue does not recur. A complete review of all Selective Service requirements since the change in procedure for Fall 2019 has been completed, including 2019-2020 and 2020-2021 award year records and corrective measures have been taken for any issues found. Estimated Completion Date: September 8, 2020 Contact Person: Douglas R. Tanner, Director of Financial Aid Telephone: (229) 245-2471; E-mail: dtanner@valdosta.edu
A sample of 40 students from a population of 1,564 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? Two students were not in compliance with the Institution?s published Satisfactory Academic Progress (SAP) policies. The students did not meet the quantitative and qualitative requirement of SAP, which resulted in over disbursements totaling $10,840.00. ? One student was awarded more financial aid than their cost of attendance budget. ? Transfer monitoring was not completed properly for 12 students. ? Information from the U.S. Department of Education?s Common Origination and Disbursement website did not agree to the information reflected in the student information system for one student. Questioned Costs: Upon testing a sample of $216,445.80 in financial aid disbursements, known questioned costs of $11,340.00 were identified for the students who received student financial assistance in excess of their eligibility. Using the total population amount of $9,214,497.36, we project the likely questioned costs to be approximately $482,764.74. The following CFDA numbers were affected by the known and likely questioned costs: 84.007, 84.063, and 84.268. Cause: In discussing these deficiencies with management, they stated that errors occurred as a result of human error, student information system coding issues, and a change in the SAP policy related to transfer students effective at the beginning of the Spring 2020 semester. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with Federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-020 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Program Federal Award Number: P007A190964 (Year: 2020), P033A190964 (Year: 2020), P063P193513 (Year: 2020), P268K203513 (Year: 2020) Questioned Costs: $11,340.00 The Institution?s Student Financial Aid Office improperly determined the Student Financial Assistance (SFA) award amounts for eligible students. Criteria: Provisions included in 34 CFR 668 provide general provisions for administering SFA programs and 34 CFR, 675, 676, 685, and 690 provide eligibility and other related program requirements that are specific to the Federal Work-Study Program, Federal Supplemental Educational Opportunity Grant (FSEOG) Program, Federal Direct Student Loans Program, and Federal Pell Grant Program, respectively. Condition: A sample of 40 students from a population of 1,564 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiencies were identified: ? Two students were not in compliance with the Institution?s published Satisfactory Academic Progress (SAP) policies. The students did not meet the quantitative and qualitative requirement of SAP, which resulted in over disbursements totaling $10,840.00. ? One student was awarded more financial aid than their cost of attendance budget. ? Transfer monitoring was not completed properly for 12 students. ? Information from the U.S. Department of Education?s Common Origination and Disbursement website did not agree to the information reflected in the student information system for one student. Questioned Costs: Upon testing a sample of $216,445.80 in financial aid disbursements, known questioned costs of $11,340.00 were identified for the students who received student financial assistance in excess of their eligibility. Using the total population amount of $9,214,497.36, we project the likely questioned costs to be approximately $482,764.74. The following CFDA numbers were affected by the known and likely questioned costs: 84.007, 84.063, and 84.268. Cause: In discussing these deficiencies with management, they stated that errors occurred as a result of human error, student information system coding issues, and a change in the SAP policy related to transfer students effective at the beginning of the Spring 2020 semester. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, the Institution was not in compliance with Federal regulations concerning awarding of SFA funds to students. Recommendation: The Institution should review its processes and procedures for determining each student?s financial aid eligibility. Where vulnerable, the Institution should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with Federal requirements. Additionally, the Institution should develop and implement a monitoring process to ensure that controls are functioning properly. The Institution should also contact the U.S. Department of Education regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2020-020 Improve Controls over the Awarding Process Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College Corrective Action Plans: The Office of Financial Aid in conjunction with the Office of the Registrar will review the internal control processes associated with awarding students aid, including a review of the Banner setup rules in order to ensure the accurate calculation of Satisfactory Academic Progress (SAP). The transfer monitoring process has already been reworked so that students who transfer mid-year are put on hold for seven days. This hold will prevent students from receiving aid until the institution can ensure they have not been paid for the same term at another institution. In previous years AMSC completed transfer monitoring, however it was deleted in Banner after the 7-day expiration. Going forward, AMSC will leave the holds in Banner with an expiration date as a point of reference. Estimated Completion Date: December 31, 2020 Contact Person: Carol Jones, Financial Aid Director Telephone: (678) 623-1182; E-mail: cjones@atlm.edu
A sample of 27 students from a population of 133 students who received student financial assistance (SFA) for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution was randomly selected for testing using a non-statistical sampling method. The students? Return of Title IV calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for three students who withdrew during the Fall 2019 semester and one student who withdrew during the Spring 2020 semester could not be provided for review. Therefore, it could not be determined if these calculations were performed or accurate. As a result, refunds in the amount of $7,095.58 were not supported with adequate documentation at the time of the audit. ? The refund calculations for four students who withdrew during the Fall 2019 semester and three students who withdrew during the Spring 2020 semester were calculated incorrectly due to the use of award information and/or institutional charges. Of the Fall 2019 refunds, four students were requested to return $1,100.89 more than the required amount to various SFA programs. Spring 2020 refunds were not required to be returned to the various SFA programs due to a waiver provided by the U.S. Department of Education. ? The proration between the school and student portion of the refund was incorrect for four students who withdrew during the Fall 2019 semester and two students who withdrew during the Spring 2020 semester. ? The school portion of the refund calculated by the entity did not agree to the amount actually refunded in Banner for three students who withdrew during the Fall 2019 semester. ? Funds were not returned to the appropriate grantor programs within the required time frame for 15 of the withdrawn students tested. In addition, a sample of 26 students from a population of 128 students who received Federal financial assistance for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution but for whom no Return of Title IV calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that refund calculations were not performed appropriately for eight students who withdrew during the Fall 2019 semester and three students who withdrew during the Spring 2020 semester. As a result, refunds in the amount of $8,991.41 were not processed appropriately. Questioned Costs: Upon testing a sample of $60,534.00 in financial aid disbursements to students for whom a Return of Title IV calculation was completed and a sample of $60,890.52 in financial aid disbursements to students who withdrew but for whom no Return of Title IV calculation was performed, known questioned costs of $16,086.99 were identified for refunds not adequately documented and omitted Return of Title IV calculations. Using the total population amount of $712,857.52, we project the likely questioned costs to be approximately $96,163.44. The following CFDA numbers were affected by the known and likely questioned costs: 84.007, 84.063, and 84.268. Cause: In discussing these deficiencies with management, they stated that errors occurred because manual calculations were performed for some students, student information system configurations were incorrect, and Return of Title IV calculations were duplicated for some students. In addition, there was turnover within the Student Financial Aid Department. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The school?s portion of the refunds that were not calculated or were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, improperly identifying withdrawn students, not performing Return of Title IV calculations, and/or not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should revise and implement procedures to ensure that students who withdrew from the Institution are identified, student financial aid refunds are properly calculated, and that unearned funds are correctly returned to the appropriate accounts in a timely manner in accordance with the Higher Education Amendments 1998, Public Law 105-244. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should also contact the U.S. Department of Education regarding resolution of the finding. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-021 Strengthen Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work-Study Program 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Program Federal Award Number: P007A190964 (Year: 2020), P033A190964 (Year: 2020), P063P193513 (Year: 2020), P268K203513 (Year: 2020) Questioned Costs: $16,086.99 Repeat of Prior Year Finding: FA-2017-004 The Institution did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Criteria: Provisions included in 34 CFR 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The Institution is required to determine the amount of Title IV funds that the student earned as of the student?s withdrawal date when a recipient of Title IV funds withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Condition: A sample of 27 students from a population of 133 students who received student financial assistance (SFA) for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution was randomly selected for testing using a non-statistical sampling method. The students? Return of Title IV calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agency and/or student in a timely manner. The following deficiencies were noted: ? The refund calculations for three students who withdrew during the Fall 2019 semester and one student who withdrew during the Spring 2020 semester could not be provided for review. Therefore, it could not be determined if these calculations were performed or accurate. As a result, refunds in the amount of $7,095.58 were not supported with adequate documentation at the time of the audit. ? The refund calculations for four students who withdrew during the Fall 2019 semester and three students who withdrew during the Spring 2020 semester were calculated incorrectly due to the use of award information and/or institutional charges. Of the Fall 2019 refunds, four students were requested to return $1,100.89 more than the required amount to various SFA programs. Spring 2020 refunds were not required to be returned to the various SFA programs due to a waiver provided by the U.S. Department of Education. ? The proration between the school and student portion of the refund was incorrect for four students who withdrew during the Fall 2019 semester and two students who withdrew during the Spring 2020 semester. ? The school portion of the refund calculated by the entity did not agree to the amount actually refunded in Banner for three students who withdrew during the Fall 2019 semester. ? Funds were not returned to the appropriate grantor programs within the required time frame for 15 of the withdrawn students tested. In addition, a sample of 26 students from a population of 128 students who received Federal financial assistance for the Fall 2019 and Spring 2020 semesters and withdrew from the Institution but for whom no Return of Title IV calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that refund calculations were not performed appropriately for eight students who withdrew during the Fall 2019 semester and three students who withdrew during the Spring 2020 semester. As a result, refunds in the amount of $8,991.41 were not processed appropriately. Questioned Costs: Upon testing a sample of $60,534.00 in financial aid disbursements to students for whom a Return of Title IV calculation was completed and a sample of $60,890.52 in financial aid disbursements to students who withdrew but for whom no Return of Title IV calculation was performed, known questioned costs of $16,086.99 were identified for refunds not adequately documented and omitted Return of Title IV calculations. Using the total population amount of $712,857.52, we project the likely questioned costs to be approximately $96,163.44. The following CFDA numbers were affected by the known and likely questioned costs: 84.007, 84.063, and 84.268. Cause: In discussing these deficiencies with management, they stated that errors occurred because manual calculations were performed for some students, student information system configurations were incorrect, and Return of Title IV calculations were duplicated for some students. In addition, there was turnover within the Student Financial Aid Department. Effect: These deficiencies may expose the Institution to unnecessary financial strains and shortages. The school?s portion of the refunds that were not calculated or were not calculated correctly must be returned to the U.S. Department of Education. Though the Institution may attempt to collect the funds from individual students affected by the errors, these collection efforts could be unsuccessful as the students may no longer attend the Institution and/or fail to repay the funds. Additionally, improperly identifying withdrawn students, not performing Return of Title IV calculations, and/or not returning unearned Title IV funds to the U.S Department of Education in a timely manner may result in adverse actions and impact the Institution?s participation in Title IV programs. Recommendation: The Institution should revise and implement procedures to ensure that students who withdrew from the Institution are identified, student financial aid refunds are properly calculated, and that unearned funds are correctly returned to the appropriate accounts in a timely manner in accordance with the Higher Education Amendments 1998, Public Law 105-244. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The Institution should also contact the U.S. Department of Education regarding resolution of the finding. Views of Responsible Officials: We concur with this finding.
2020-021 Strengthen Controls over the Return of Title IV Funds Process Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College Corrective Action Plans: The institution has updated its institutional procedures for processing Return to Title IV (R2T4), in order to ensure complete and accurate calculations. The updated procedures will include a mechanism for identifying students who completely withdraw. The Office of Financial Aid is working in conjunction with the Office of the Registrar to streamline this process. The Office of the Registrar now requires a last date of attendance for any student who does not successfully complete classes during the semester. All withdrawal forms are now in the process of be moved to an electronic form which will be routed from the student to the instructor, then to the Registrar and finally to the Office of Financial Aid. In addition, the Office of Financial Aid has now been moved from the Division of Enrollment Services to the Division of Fiscal Affairs. Estimated Completion Date: December 31, 2020 Contact Person: Carol Jones, Financial Aid Director Telephone: (678) 623-1182; E-mail: cjones@atlm.edu
A sample of 60 students who received Federal Pell Grant Program and Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For 22 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 17 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For 20 students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For three students, the Published Program Length Measurement and Published Program Length reflected on the Program-Level Record was not appropriate based upon review of the Institution?s catalog. ? For one student, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. Cause: In discussing these deficiencies with management, they stated that errors in the Return of Title IV process caused reporting to the NSLDS to be incorrect and untimely. Effect: If enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Additionally, the Institution was not in compliance with Federal regulations concerning enrollment reporting requirements. Recommendation: The Institution should implement policies and procedures to ensure that all changes in student enrollment statuses are reported in a timely manner. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-022 Improve Controls over Enrollment Reporting Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Program Federal Award Number: P063P193513 (Year: 2020), P268K203513 (Year: 2020) Questioned Costs: None Identified Changes in student enrollment statuses were not reported to required organizations in a timely and accurate manner. Criteria: Regarding the enrollment reporting process, provisions included in 34 CFR 685.309(b) state in part ?(1) Upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return the report to the Secretary ? (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe prescribed by the Secretary. (2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that ? (i) ? the student has ceased to be enrolled on at least a half-time basis for the period.? In addition, per the National Student Loan Data System (NSLDS) Enrollment Reporting Guide issued by the U.S. Department of Education, students who have received Federal Pell Grant funds will be included on the NSLDS roster file received by each institution and are subject to the same enrollment reporting requirements as those students who have received a loan under the William D. Ford Federal Direct Loan Program. Condition: A sample of 60 students who received Federal Pell Grant Program and Federal Direct Student Loan funds and had a reduction or increase in attendance level, graduated, withdrew, dropped out, or enrolled but never attended during the audit period was randomly selected for testing using a non-statistical sampling method. NSLDS Enrollment Detail information was reviewed for each student to ensure that the Institution accurately reported significant data elements under both the Campus-Level and Program-Level Record. The following deficiencies were identified: ? For 22 students, the Enrollment Effective Date and/or Program Enrollment Effective Date reflected on the Campus-Level Record and/or Program-Level Record, respectively, did not agree to the date on which the current enrollment status reported for the student was first effective. ? For 17 students, the Enrollment Status and/or Program Enrollment Status reflected on the Campus-Level and/or Program Level Record, respectively, was not appropriate based upon the student?s enrollment status as of the reporting date. ? For 20 students, the Certification Date reflected on the Campus-Level Record was not within 60 days of the students? change in enrollment. ? For three students, the Published Program Length Measurement and Published Program Length reflected on the Program-Level Record was not appropriate based upon review of the Institution?s catalog. ? For one student, the Program Begin Date reflected on the Program-Level Record did not agree with the information reported in the student information system. Cause: In discussing these deficiencies with management, they stated that errors in the Return of Title IV process caused reporting to the NSLDS to be incorrect and untimely. Effect: If enrollment statuses are not submitted appropriately to NSLDS by the Institution, loan interest subsidies may be negatively affected, deferments of Federal Direct Student Loans may be continued in error, loan repayment dates could be recorded incorrectly, and the compilation of data associated with other Title IV aid programs could be adversely affected. Additionally, the Institution was not in compliance with Federal regulations concerning enrollment reporting requirements. Recommendation: The Institution should implement policies and procedures to ensure that all changes in student enrollment statuses are reported in a timely manner. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2020-022 Improve Controls over Enrollment Reporting Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College Corrective Action Plans: The process of enrollment reporting has been the responsibility of two different areas in the past. The process will be officially assigned to one specific office going beginning in fiscal year 2021. A schedule along with policies and procedures will be developed to ensure the proper and timely reporting of this data. In addition, the enhancements noted in finding 2020-021 regarding R2T4 will help to further assist in the timely updating of enrollment as well as the implementation of electronic forms will further enhance our ability to keep up with enrollment changes and ensure data is accurately reported to the National Student Clearinghouse. Estimated Completion Date: January 31, 2021 Contact Person: Rob Wingfield, Registrar Telephone: (678) 623-1202; E-mail: rwingfield@atlm.edu
A sample of three monthly Federal Direct Student Loan program reconciliations was randomly selected for testing using a non-statistical sampling method. The monthly reconciliations were reviewed to ensure that the School Account Statement (SAS) data files provided by the U.S. Department of Education?s Common Origination and Disbursement (COD) system were reconciled appropriately to the student information system and institution?s financial records and variances were resolved in a timely manner. Testing revealed that these reconciliations were not performed for two months tested. Cause: In discussing these deficiencies with management, they stated that turnover in the Student Financial Aid Department and a lack of manpower caused some tasks to be delayed or go uncompleted. Effect: If Federal Direct Student Loans are not reconciled appropriately each month, the Institution is not in compliance with their program participation of agreement or Federal regulations concerning Federal Direct Student Loans. In addition, omissions and errors in information submitted to the COD system or within the student information system may not be identified and corrected in a timely manner. Furthermore, if all SAS data is not reconciled appropriately, the Institution cannot close out the Direct Loan account in the COD system at the end of the award year. Recommendation: The Institution should establish procedures and assign responsibility for the monthly and yearly reconciliation of the Federal Direct Student Loan program activity to ensure that the guidelines contained in the Direct Loan School Guide and Federal Student Aid Handbook are followed. The Institution?s Financial Aid and Business Offices should maintain their internal records in such a way that they can prepare the monthly reconciliations accurately and timely. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
Show full finding ▾Hide full finding ▴2020-023 Strengthen Controls over the Federal Direct Student Loans Reconciliation Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None CFDA Numbers and Titles: 84.268 ? Federal Direct Student Loans Program Federal Award Number: P268K203513 (Year: 2020) Questioned Costs: None Identified Repeat of Prior Year Finding: FA-2017-005 The Institution did not perform the required monthly reconciliations for Federal Direct Student Loans appropriately. Criteria: Provisions included in 34 CFR 685.300(b) state in part that upon entering into a written program participation agreement associated with Federal Direct Student Loans ?the school much promise to comply with the [Higher Education] Act [of 1965] and applicable regulations and must agree to ? (5) on a monthly basis, reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary.? Condition: A sample of three monthly Federal Direct Student Loan program reconciliations was randomly selected for testing using a non-statistical sampling method. The monthly reconciliations were reviewed to ensure that the School Account Statement (SAS) data files provided by the U.S. Department of Education?s Common Origination and Disbursement (COD) system were reconciled appropriately to the student information system and institution?s financial records and variances were resolved in a timely manner. Testing revealed that these reconciliations were not performed for two months tested. Cause: In discussing these deficiencies with management, they stated that turnover in the Student Financial Aid Department and a lack of manpower caused some tasks to be delayed or go uncompleted. Effect: If Federal Direct Student Loans are not reconciled appropriately each month, the Institution is not in compliance with their program participation of agreement or Federal regulations concerning Federal Direct Student Loans. In addition, omissions and errors in information submitted to the COD system or within the student information system may not be identified and corrected in a timely manner. Furthermore, if all SAS data is not reconciled appropriately, the Institution cannot close out the Direct Loan account in the COD system at the end of the award year. Recommendation: The Institution should establish procedures and assign responsibility for the monthly and yearly reconciliation of the Federal Direct Student Loan program activity to ensure that the guidelines contained in the Direct Loan School Guide and Federal Student Aid Handbook are followed. The Institution?s Financial Aid and Business Offices should maintain their internal records in such a way that they can prepare the monthly reconciliations accurately and timely. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2020-023 Strengthen Controls over the Federal Direct Student Loans Reconciliation Process Federal Agency: U.S. Department of Education State Entity: Atlanta Metropolitan State College Corrective Action Plans: The Office of Financial Aid was understaffed during FY20 and thus reconciliations were not done in a timely manner. AMSC has since added an additional part-time staff member in SFA to help with the reconciliation process going forward into FY21. The additional staff person will focus solely on monthly and annual reconciliations. In addition, the Office of Financial Aid had now been moved from the Division of Enrollment Services to the Division of Fiscal Affairs. Estimated Completion Date: May 31, 2020 Contact Person: Carol Jones, Financial Aid Director Telephone: (678) 623-1182; E-mail: cjones@atlm.edu
A sample of 60 UI benefits payment transactions processed by the DOL was randomly selected for testing using a non-statistical sampling method. During our testing of 14 PUA claims within this sample, we reviewed each claimant?s UC application to verify that the claimant was not eligible for UC and subsequently reviewed each claimant?s PUA application to determine eligibility. Additionally, if there was conflicting information between the UC application and PUA application, supporting documentation was reviewed to validate the information reflected on the PUA application. The following deficiencies were identified: ? One claimant reported wages for one employer on their UC application but reported being separated from a different employer on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. Furthermore, it was found that the claimant was paid more than the minimum PUA amount and was required to provide evidence to support the payment of a higher amount within 21 days. Though the salary match process was performed by DOL to obtain data reflected in the Georgia Department of Revenue?s records, the employer listed on the PUA application did not agree to the employer listed in the Georgia Department of Revenue?s records. Appropriate documentation to support amounts paid to this claimant was not obtained until January 27, 2021 when discovered by auditors. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review and this resulted in an overpayment of $2,376 from the PUA program. ? One claimant reported wages that ended in December 2019 within the UC system but stated that their employment ended in March 2020 on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. ? Three claimants were eligible to receive benefit payments under the PEUC program but were paid under the PUA program. While a total of $4,276 was paid from the incorrect program, no net overpayments occurred as a result of these errors. In addition, upon review of a sample of benefit payment transactions to determine if the Benefits Expense amount was reported appropriately within the Unemployment Compensation Fund (UCF), the following deficiencies were identified: ? One claimant was determined to be eligible for regular UC by DOL. However, the claimant was considered to be self-employed, and the claim should have been for PUA, rather than regular UC. This resulted in an overpayment of $130 for the week selected for testing and a total overpayment of $9,490. ? One claimant did not have an appropriate eligibility determination for the week associated with the transaction tested. This resulted in an overpayment of $330 for the week selected for testing and a total overpayment of $930. ? Per review of one claimant?s PUA application, they ceased employment before PUA was available for payment. Once this information was discovered by the auditors, DOL performed an investigation and obtained appropriate documentation to validate the correct date on which the claimant actually ceased employment; however, it was noted by auditors that the claimant was paid for periods before this adjusted date. This resulted in an overpayment of $149 for the week selected for testing and a total overpayment of $1,643 for all weeks for which the claimant was paid prior to the date on which they reported their employment was affected by the pandemic. ? One claimant reported wages on their PUA application and, based upon this disclosure, was paid a weekly benefit amount that exceeded the minimum amount. However, the claimant did not provide documentation to support the wages reported on the application within 21 days as required. This documentation was not obtained by the DOL until March 17, 2021 upon being discovered by auditors in January 2021. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review. This resulted in an overpayment of $27 for the week selected for testing and a total overpayment of $459. Questioned Costs: Known questioned costs of $2,376 were identified for the claimant who did not submit appropriate documentation within 21 days to receive PUA payments in excess of the minimum amount, and known questioned costs of $12,522 were identified upon review of the Benefits Expense balance reported in the UCF for additional regular UC and PUA payments in excess of the claimants? eligibility. Using the population of UC payments associated with the CARES Act, which totaled $6,220,521,193, and the known questioned costs of $2,376 associated with the claimant who did not submit appropriate documentation within 21 days to receive PUA payments in excess of the minimum amount, we project likely questioned costs to be approximately $40,429,789. Cause: Due to the unprecedented volume of UC claims related to the COVID-19 pandemic and the short time in which to implement the CARES Act programs with limited guidance, existing controls over claims processing were modified and/or eliminated. In addition, the DOL did not have adequate controls to identify or a process in place to redetermine the weekly benefit amount for claimants who did not submit appropriate documentation to substantiate stated wages on the PUA application and received payments in excess of the minimum. Furthermore, the PUA program was implemented within the DOL?s information system prior to the PEUC program and individuals were inappropriately allowed to receive to PUA payments before eligibility for the PEUC program was determined. Effect: Without effective controls, the DOL increases its risk of providing benefits to ineligible claimants and not detecting improper payments. The deficiencies in eligibility determinations also resulted in noncompliance with federal regulations and questioned costs. While funds for UC, FPUC, PUA and PEUC benefit payments are not provided to states through grant awards, states are awarded funds to administer these programs. Grant provisions allow the grantor to penalize DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits in the future. Recommendation: The DOL management should develop and implement internal controls over eligibility and claims processing to ensure procedures are consistently enforced and operating effectively. Management should also provide training on procedures for processing unemployment claims for new programs created by the CARES Act. In addition, strong monitoring controls should be implemented to ensure that the DOL achieves its objectives in complying with the eligibility requirements for the various UC programs. Views of Responsible Officials: We concur with the finding. After review of the cases, we find the following: 1. One claimant reported wages for one employer on their UC application but reported being separated from a different employer on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. Furthermore, it was found that the claimant was paid more than the minimum PUA amount and was required to provide evidence to support the payment of a higher amount within 21 days. Though the salary match process was performed by DOL to obtain data reflected in the Georgia Department of Revenue?s records, the employer listed on the PUA application did not agree to the employer listed in the Georgia Department of Revenue?s records. Appropriate documentation to support amounts paid to this claimant was not obtained until January 27, 2021 when discovered by auditors. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review and this resulted in an overpayment of $2,376 from the PUA program. GDOL Response: An overpayment is not in order given the documentation available on the Department of Revenue interface. As indicated by USDOL, ?The PUA WBA will be the amount of compensation an individual would have been paid regularly as computed under the provisions of the applicable state law, using the state?s existing wage records and any additional supporting evidence provided by the individual. The state may use their interface to verify wages and compute the PUA WBA in lieu of claimant documentation.? 2. One claimant reported wages that ended in December 2019 within the UC system but stated that their employment ended in March 2020 on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. GDOL Response: Claimant provided sufficient proof by the deadline that she was scheduled to begin work again with the film industry in March 2020 but could not due to COVID. Claimant?s work was affected by COVID; therefore, she is eligible for PUA benefits. Federal regulations, found in Unemployment Insurance Program Letter 16-20 state an individual who was scheduled to start a job but could not due to COVID is eligible to receive PUA and FPUC accordingly. 3. One claimant reported wages on their PUA application and, based upon this disclosure, was paid a weekly benefit amount that exceeded the minimum amount. However, the claimant did not provide documentation to support the wages reported on the application within 21 days as required. This documentation was not obtained by the DOL until March 17, 2021 upon being discovered by auditors in January 2021. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review. This resulted in an overpayment of $27 for the week selected for testing and a total overpayment of $459. GDOL Response: An overpayment is not in order given the documentation available on the Department of Revenue interface. As indicated by USDOL, ?The PUA WBA will be the amount of compensation an individual would have been paid regularly as computed under the provisions of the applicable state law, using the state?s existing wage records and any additional supporting evidence provided by the individual. The state may use their interface to verify wages and compute the PUA WBA in lieu of claimant documentation.? Auditor?s Concluding Remarks: The DOL states that various documentation was obtained to address ineligible payments identified by the auditors; however, documentation was not obtained within the appropriate timeframe. After completing our testing over benefits payments and associated eligibility criteria in January 2021, we provided the results of this testing to the DOL management and gave the DOL the opportunity to provide additional documentation for our review. Based on the DOL?s response and information provided, auditors reduced the number of errors noted. On January 27, 2021, the DOL confirmed that the remaining errors noted by auditors should be reported as ineligible payments. On March 29, 2021 additional documentation was provided by the DOL to address several of these errors. Auditors reduced the dollar amount of ineligible payments based upon the updated documentation provided by the DOL. In all cases disputed by the DOL within the ?Views of Responsible Officials? above, appropriate documentation to support eligibility was obtained from claimants after testing was performed and issues were noted by the auditors. The auditors acknowledge when DOL followed up on the issues identified, the results yielded these claimants were eligible for benefits. However, at the point when audit procedures were performed, DOL did not have the appropriate documentation to confirm eligibility as required, which signifies a control issue. While the DOAA appreciates the efforts made by the DOL in following up on the issues noted by auditors, the errors noted by auditors related to the testing of a sample of claimants who received UC payments during fiscal year 2020. Audit sampling is the process of selecting a number of items that are expected to be representative of the overall population for testing with all items in the population having an opportunity to be selected, allowing for the results of the sample testing to be projected to the entire population. Though auditors noted problems with a small number of claimants tested via sampling, the projected effect of the issues identified is significant to the overall population of claimants who received UC payments during the period under review. Further, though the DOL subsequently followed up on issues noted within the sample by the DOAA, these same errors are likely present in the remaining population of UC recipients that were not selected for testing by auditors and were not corrected. The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL during the last quarter of fiscal year 2020 due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, given the comments above, we reaffirm our finding and will review the status of the DOL?s corrective actions during our next audit.
Show full finding ▾Hide full finding ▴2020-036 Improve Controls over Eligibility Determinations Compliance Requirement: Eligibility Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None CFDA Number and Title: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI347102055A13 (Year: 2020) Questioned Costs: $14,898 The Georgia Department of Labor did not have effective internal controls in place to ensure unemployment benefit payments were made only to eligible claimants. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional UI provisions. Title II, Subtitle A of the CARES Act, authorizes the following temporary UI programs: ? Federal Pandemic Unemployment Compensation (FPUC) ? The FPUC program provides eligible individuals with $600 per week in addition to the weekly benefit amount they receive from certain other UC programs. ? Pandemic Emergency Unemployment Compensation (PEUC) ? The PEUC program provides up to 13 weeks of benefits to individuals who have exhausted all rights to regular compensation under state law or Federal law with respect to a benefit year that ended on or after July 1, 2019, have no rights to regular compensation with respect to a week under any other State or Federal UC law, are not receiving compensation with respect to such week under the UC law of Canada, and are able to work, available to work, and actively seeking work. ? Pandemic Unemployment Assistance (PUA) ? The PUA program provides up to 39 weeks of benefits to those individuals who are not eligible for regular UC or extended benefits under State or Federal law or PEUC, including those who have exhausted all rights to such benefits. The Georgia Department of Labor (DOL) paid out more than $2.2 billion and $8 billion in UC and CARES Act benefits, respectively, to over 1.3 million individuals for the fiscal year under review. Criteria: Section 2102 of the CARES Act provides for the payment of PUA to those qualifying as a ?covered individual.? A covered individual is ?an individual who is not eligible for regular compensation, or extended benefits under State or Federal law or PEUC?, including an individual who has exhausted all rights to regular unemployment or extended benefits under State or Federal law or PEUC...? A covered individual may include those who are self-employed, individuals seeking part-time employment, individuals lacking sufficient work history, or those who otherwise not qualified for regular UC, extended benefits, or PEUC. Per Appendix I, Section C-7 of UI Program Letter (UIPL) No. 16-20, ?? b. In processing claims for PUA, states must verify that individuals have no regular UI entitlement. If the individual is not eligible for regular UI because there are insufficient covered wages or the individual has an active UI claim with a definite or indefinite disqualification, then a state does not need to require the individual to file a regular UI initial claim. However, the state must have an established process whereby the individual?s ineligibility for regular UI is documented on the application. c. If the individual?s eligibility for regular UI is questionable (for example, there are wages in the base period but no claim is filed, or a job separation that has not been adjudicated), then the state must first require the individual to file a regular UI initial claim. If the individual is subsequently disqualified, then the state may consider the individual for PUA eligibility.? Additionally, Question 13 within Attachment I to UIPL No. 16-20 Change 1 states that ?the PUA WBA [weekly benefit amount] will be the amount of compensation an individual would have been paid regularly as computed under the provisions of the applicable state law, using the state?s existing wage records and any additional supporting evidence provided by the individual? However, an individual will be provided the minimum PUA WBA if the state does not have any existing wage records and he or she does not provide evidence to support a higher amount.? Further, Question 20 within Attachment I to UIPL No. 16-20 Change 1 states that ?if an individual does not provide proof of CY [calendar year] 2019 (i.e., PUA base period) wages within 21 days, an individual?s WBA will be reduced based on whichever is higher ? the record of wages already on file or the minimum PUA WBA. An overpayment must be established for any benefits overpaid.? Condition: A sample of 60 UI benefits payment transactions processed by the DOL was randomly selected for testing using a non-statistical sampling method. During our testing of 14 PUA claims within this sample, we reviewed each claimant?s UC application to verify that the claimant was not eligible for UC and subsequently reviewed each claimant?s PUA application to determine eligibility. Additionally, if there was conflicting information between the UC application and PUA application, supporting documentation was reviewed to validate the information reflected on the PUA application. The following deficiencies were identified: ? One claimant reported wages for one employer on their UC application but reported being separated from a different employer on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. Furthermore, it was found that the claimant was paid more than the minimum PUA amount and was required to provide evidence to support the payment of a higher amount within 21 days. Though the salary match process was performed by DOL to obtain data reflected in the Georgia Department of Revenue?s records, the employer listed on the PUA application did not agree to the employer listed in the Georgia Department of Revenue?s records. Appropriate documentation to support amounts paid to this claimant was not obtained until January 27, 2021 when discovered by auditors. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review and this resulted in an overpayment of $2,376 from the PUA program. ? One claimant reported wages that ended in December 2019 within the UC system but stated that their employment ended in March 2020 on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. ? Three claimants were eligible to receive benefit payments under the PEUC program but were paid under the PUA program. While a total of $4,276 was paid from the incorrect program, no net overpayments occurred as a result of these errors. In addition, upon review of a sample of benefit payment transactions to determine if the Benefits Expense amount was reported appropriately within the Unemployment Compensation Fund (UCF), the following deficiencies were identified: ? One claimant was determined to be eligible for regular UC by DOL. However, the claimant was considered to be self-employed, and the claim should have been for PUA, rather than regular UC. This resulted in an overpayment of $130 for the week selected for testing and a total overpayment of $9,490. ? One claimant did not have an appropriate eligibility determination for the week associated with the transaction tested. This resulted in an overpayment of $330 for the week selected for testing and a total overpayment of $930. ? Per review of one claimant?s PUA application, they ceased employment before PUA was available for payment. Once this information was discovered by the auditors, DOL performed an investigation and obtained appropriate documentation to validate the correct date on which the claimant actually ceased employment; however, it was noted by auditors that the claimant was paid for periods before this adjusted date. This resulted in an overpayment of $149 for the week selected for testing and a total overpayment of $1,643 for all weeks for which the claimant was paid prior to the date on which they reported their employment was affected by the pandemic. ? One claimant reported wages on their PUA application and, based upon this disclosure, was paid a weekly benefit amount that exceeded the minimum amount. However, the claimant did not provide documentation to support the wages reported on the application within 21 days as required. This documentation was not obtained by the DOL until March 17, 2021 upon being discovered by auditors in January 2021. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review. This resulted in an overpayment of $27 for the week selected for testing and a total overpayment of $459. Questioned Costs: Known questioned costs of $2,376 were identified for the claimant who did not submit appropriate documentation within 21 days to receive PUA payments in excess of the minimum amount, and known questioned costs of $12,522 were identified upon review of the Benefits Expense balance reported in the UCF for additional regular UC and PUA payments in excess of the claimants? eligibility. Using the population of UC payments associated with the CARES Act, which totaled $6,220,521,193, and the known questioned costs of $2,376 associated with the claimant who did not submit appropriate documentation within 21 days to receive PUA payments in excess of the minimum amount, we project likely questioned costs to be approximately $40,429,789. Cause: Due to the unprecedented volume of UC claims related to the COVID-19 pandemic and the short time in which to implement the CARES Act programs with limited guidance, existing controls over claims processing were modified and/or eliminated. In addition, the DOL did not have adequate controls to identify or a process in place to redetermine the weekly benefit amount for claimants who did not submit appropriate documentation to substantiate stated wages on the PUA application and received payments in excess of the minimum. Furthermore, the PUA program was implemented within the DOL?s information system prior to the PEUC program and individuals were inappropriately allowed to receive to PUA payments before eligibility for the PEUC program was determined. Effect: Without effective controls, the DOL increases its risk of providing benefits to ineligible claimants and not detecting improper payments. The deficiencies in eligibility determinations also resulted in noncompliance with federal regulations and questioned costs. While funds for UC, FPUC, PUA and PEUC benefit payments are not provided to states through grant awards, states are awarded funds to administer these programs. Grant provisions allow the grantor to penalize DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits in the future. Recommendation: The DOL management should develop and implement internal controls over eligibility and claims processing to ensure procedures are consistently enforced and operating effectively. Management should also provide training on procedures for processing unemployment claims for new programs created by the CARES Act. In addition, strong monitoring controls should be implemented to ensure that the DOL achieves its objectives in complying with the eligibility requirements for the various UC programs. Views of Responsible Officials: We concur with the finding. After review of the cases, we find the following: 1. One claimant reported wages for one employer on their UC application but reported being separated from a different employer on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. Furthermore, it was found that the claimant was paid more than the minimum PUA amount and was required to provide evidence to support the payment of a higher amount within 21 days. Though the salary match process was performed by DOL to obtain data reflected in the Georgia Department of Revenue?s records, the employer listed on the PUA application did not agree to the employer listed in the Georgia Department of Revenue?s records. Appropriate documentation to support amounts paid to this claimant was not obtained until January 27, 2021 when discovered by auditors. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review and this resulted in an overpayment of $2,376 from the PUA program. GDOL Response: An overpayment is not in order given the documentation available on the Department of Revenue interface. As indicated by USDOL, ?The PUA WBA will be the amount of compensation an individual would have been paid regularly as computed under the provisions of the applicable state law, using the state?s existing wage records and any additional supporting evidence provided by the individual. The state may use their interface to verify wages and compute the PUA WBA in lieu of claimant documentation.? 2. One claimant reported wages that ended in December 2019 within the UC system but stated that their employment ended in March 2020 on their PUA application. This conflicting information was not appropriately investigated by DOL until discovered by the auditors. GDOL Response: Claimant provided sufficient proof by the deadline that she was scheduled to begin work again with the film industry in March 2020 but could not due to COVID. Claimant?s work was affected by COVID; therefore, she is eligible for PUA benefits. Federal regulations, found in Unemployment Insurance Program Letter 16-20 state an individual who was scheduled to start a job but could not due to COVID is eligible to receive PUA and FPUC accordingly. 3. One claimant reported wages on their PUA application and, based upon this disclosure, was paid a weekly benefit amount that exceeded the minimum amount. However, the claimant did not provide documentation to support the wages reported on the application within 21 days as required. This documentation was not obtained by the DOL until March 17, 2021 upon being discovered by auditors in January 2021. While it was eventually determined that the amounts paid to this claimant were allowable, the claimant was not eligible to receive amounts in excess of the minimum during the period under review. This resulted in an overpayment of $27 for the week selected for testing and a total overpayment of $459. GDOL Response: An overpayment is not in order given the documentation available on the Department of Revenue interface. As indicated by USDOL, ?The PUA WBA will be the amount of compensation an individual would have been paid regularly as computed under the provisions of the applicable state law, using the state?s existing wage records and any additional supporting evidence provided by the individual. The state may use their interface to verify wages and compute the PUA WBA in lieu of claimant documentation.? Auditor?s Concluding Remarks: The DOL states that various documentation was obtained to address ineligible payments identified by the auditors; however, documentation was not obtained within the appropriate timeframe. After completing our testing over benefits payments and associated eligibility criteria in January 2021, we provided the results of this testing to the DOL management and gave the DOL the opportunity to provide additional documentation for our review. Based on the DOL?s response and information provided, auditors reduced the number of errors noted. On January 27, 2021, the DOL confirmed that the remaining errors noted by auditors should be reported as ineligible payments. On March 29, 2021 additional documentation was provided by the DOL to address several of these errors. Auditors reduced the dollar amount of ineligible payments based upon the updated documentation provided by the DOL. In all cases disputed by the DOL within the ?Views of Responsible Officials? above, appropriate documentation to support eligibility was obtained from claimants after testing was performed and issues were noted by the auditors. The auditors acknowledge when DOL followed up on the issues identified, the results yielded these claimants were eligible for benefits. However, at the point when audit procedures were performed, DOL did not have the appropriate documentation to confirm eligibility as required, which signifies a control issue. While the DOAA appreciates the efforts made by the DOL in following up on the issues noted by auditors, the errors noted by auditors related to the testing of a sample of claimants who received UC payments during fiscal year 2020. Audit sampling is the process of selecting a number of items that are expected to be representative of the overall population for testing with all items in the population having an opportunity to be selected, allowing for the results of the sample testing to be projected to the entire population. Though auditors noted problems with a small number of claimants tested via sampling, the projected effect of the issues identified is significant to the overall population of claimants who received UC payments during the period under review. Further, though the DOL subsequently followed up on issues noted within the sample by the DOAA, these same errors are likely present in the remaining population of UC recipients that were not selected for testing by auditors and were not corrected. The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL during the last quarter of fiscal year 2020 due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. However, given the comments above, we reaffirm our finding and will review the status of the DOL?s corrective actions during our next audit.
2020-036 Improve Controls over Eligibility Determinations Federal Agency: U.S. Department of Labor State Entity: Department of Labor Corrective Action Plans: Training on the CARES Act has been provided since implementation of the programs. Resource materials, memorandums and desk-aids are released, as appropriate with program changes and process enhancements. Additionally, when new applications are developed, processing changes made, and/or new staff are hired or moved into new roles, training is provided on the subject matter, as appropriate. Modifications to the Pandemic Unemployment Assistance (PUA) application will be made to display existing information previously provided by the claimant on the most recent application for unemployment benefits. This is to remind the claimant of pre-existing information prior to allowing them to enter new information to be used when considering eligibility. Develop an automatic process to establish overpayments appropriately for individuals who fail to respond timely to requests for proof of employment and wages. The ability for claimants with the appropriate credentials to upload proof of documentation for PUA eligibility has been implemented. System and workflow processes are under development to detect responses as they are received. A ready to work indicator will be updated to Yes as documents are submitted. The system will maintain a counter from the date of notification to the deadline and initiate a workflow process to release a fail to report determination, adjust the monetary entitlement for the impacted period and establish overpayments, as appropriate. Estimated Completion Date: June 30, 2021 Claims where individuals were paid PUA before Pandemic Emergency Unemployment Compensation (PEUC) will be adjusted to move the claimant to the appropriate program. PEUC claims will be established, monetary determinations released and payments will be moved to the appropriate PEUC benefit year claim. When the PUA weekly benefit amount (WBA) is less than the PEUC WBA, then deficiency payments will be made for the appropriate weeks. Further, when the PUA WBA is more than the PEUC WBA, an overpayment will be established for the appropriate weeks. Estimated Completion Date: September 6, 2021 Estimated Completion Date: June 30, 2021 Contact Person: Crystal Singleton, UI Policy and Procedures Telephone: (404) 232-3183; E-mail: Crystal.Singleton@gdol.ga.gov
See Financial Statement Finding 2020-007. Cause: See Financial Statement Finding 2020-007. Effect: See Financial Statement Finding 2020-007. Recommendation: See Financial Statement Finding 2020-007. Views of Responsible Officials: The Department concurs in part with this finding: a. The Department agrees that the objective of the logical controls process is to avoid the unnecessary risk of unauthorized access to the unemployment insurance and possible manipulation or loss of data. b. GDOL agrees that 17 out of 25 system users tested had various access and permissions associated with some roles that were not required for their normal job roles and responsibilities. c. Further analysis of the 17 identified users resulted in the following breakdown: i. Several transactions should have been classified as belonging to a role group, access granted to users through a group based on role is deemed appropriate by the group owner. ii. 14 users had 0 executions of any of the identified transactions iii. 1 user had 1 execution of a single transaction that was approved by a different manager during the 2019 user review iv. 1 user executed 3 transactions multiple times; manager indicated access should have been appropriate v. 1 user executed 3 transactions multiple times - this was a new user that had been set up with access provisioned as directed by the manager, but upon redirect the manager indicated access was inappropriate for the 3 transactions in question; this situation would have likely been resolved by the annual user access review d. Information Technology performs annual global access monitoring, which serves to further mitigate any risk of unauthorized access to systems within the Department network. e. The Information Technology division enhanced the annual transaction access review in FY19 to include a biennial role design review with the appropriate business units to insure transactions assigned to the role continue to be appropriate based on job responsibilities and business functions. f. Due to the COVID pandemic, GDOL was faced with multiple priorities to process unemployment benefits. Due to the state of emergency put in place by the Governor, resources were not available to conduct the annual user access review, normally scheduled between April/May. Although several attempts were made to schedule the review, the unprecedented number of claims received and processed prevented the review from being performed before the end of the fiscal year. g. The Department agrees that certain enhancements as detailed in the Corrective Action Plan will further improve our current process. Auditor?s Concluding Remarks: We thank the Department?s Information Technology Division for its cooperation and assistance throughout the audit. During our audit we presented DOL management with the results of our logical access controls testing and gave the DOL the opportunity to provide additional documentation for our review. In addition to having access to the system through groups, each of the 17 system users identified in the condition had inappropriate permissions to the system directly provisioned to the user, which is outside of a group. When these inappropriate permissions provisioned to the 17 users were brought to the attention of DOL by the auditors, management confirmed the access was inappropriate and removed the access from all 17 users. The 25 system users selected for testing are expected to be representative of 1164 system users that have the ability to make changes within the system. All users in this population had the equal opportunity to be selected for testing, and therefore there is a potential for additional system user access deficiencies that were not identified during testing. The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL during the last quarter of fiscal year 2020 due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. In addition, DOAA understands that the DOL Information Technology Division may not have had the time or resources during the course of the audit to perform further analysis on the types of transactions the users may have executed during the audit period as mentioned in the Views of Responsible Officials. However, it should also be noted that DOAA has not received audit evidence since the completion of audit field work to support the further analysis described in the Views of Responsible Officials above. Given the lack of additional audit evidence and our comments above, we reaffirm our finding and will review the status of the DOL?s corrective actions during our next audit.
Show full finding ▾Hide full finding ▴2020-037 Strengthen Logical Access Controls Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None CFDA Number and Title: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI347102055A13 (Year: 2020) Questioned Costs: None Identified The Georgia Department of Labor should strengthen logical access controls over the unemployment insurance system. Background Information: See Financial Statement Finding 2020-007. Criteria: See Financial Statement Finding 2020-007. Condition: See Financial Statement Finding 2020-007. Cause: See Financial Statement Finding 2020-007. Effect: See Financial Statement Finding 2020-007. Recommendation: See Financial Statement Finding 2020-007. Views of Responsible Officials: The Department concurs in part with this finding: a. The Department agrees that the objective of the logical controls process is to avoid the unnecessary risk of unauthorized access to the unemployment insurance and possible manipulation or loss of data. b. GDOL agrees that 17 out of 25 system users tested had various access and permissions associated with some roles that were not required for their normal job roles and responsibilities. c. Further analysis of the 17 identified users resulted in the following breakdown: i. Several transactions should have been classified as belonging to a role group, access granted to users through a group based on role is deemed appropriate by the group owner. ii. 14 users had 0 executions of any of the identified transactions iii. 1 user had 1 execution of a single transaction that was approved by a different manager during the 2019 user review iv. 1 user executed 3 transactions multiple times; manager indicated access should have been appropriate v. 1 user executed 3 transactions multiple times - this was a new user that had been set up with access provisioned as directed by the manager, but upon redirect the manager indicated access was inappropriate for the 3 transactions in question; this situation would have likely been resolved by the annual user access review d. Information Technology performs annual global access monitoring, which serves to further mitigate any risk of unauthorized access to systems within the Department network. e. The Information Technology division enhanced the annual transaction access review in FY19 to include a biennial role design review with the appropriate business units to insure transactions assigned to the role continue to be appropriate based on job responsibilities and business functions. f. Due to the COVID pandemic, GDOL was faced with multiple priorities to process unemployment benefits. Due to the state of emergency put in place by the Governor, resources were not available to conduct the annual user access review, normally scheduled between April/May. Although several attempts were made to schedule the review, the unprecedented number of claims received and processed prevented the review from being performed before the end of the fiscal year. g. The Department agrees that certain enhancements as detailed in the Corrective Action Plan will further improve our current process. Auditor?s Concluding Remarks: We thank the Department?s Information Technology Division for its cooperation and assistance throughout the audit. During our audit we presented DOL management with the results of our logical access controls testing and gave the DOL the opportunity to provide additional documentation for our review. In addition to having access to the system through groups, each of the 17 system users identified in the condition had inappropriate permissions to the system directly provisioned to the user, which is outside of a group. When these inappropriate permissions provisioned to the 17 users were brought to the attention of DOL by the auditors, management confirmed the access was inappropriate and removed the access from all 17 users. The 25 system users selected for testing are expected to be representative of 1164 system users that have the ability to make changes within the system. All users in this population had the equal opportunity to be selected for testing, and therefore there is a potential for additional system user access deficiencies that were not identified during testing. The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on the DOL during the last quarter of fiscal year 2020 due to the effects of the COVID-19 pandemic and the urgency with which payments were made to the unemployed citizens of Georgia. In addition, DOAA understands that the DOL Information Technology Division may not have had the time or resources during the course of the audit to perform further analysis on the types of transactions the users may have executed during the audit period as mentioned in the Views of Responsible Officials. However, it should also be noted that DOAA has not received audit evidence since the completion of audit field work to support the further analysis described in the Views of Responsible Officials above. Given the lack of additional audit evidence and our comments above, we reaffirm our finding and will review the status of the DOL?s corrective actions during our next audit.
2020-037 Strengthen Logical Access Controls Federal Agency: U.S. Department of Labor State Entity: Department of Labor Corrective Action Plans: The Information Technology division will continue to enhance the current annual transaction access review process. GDOL has begun the planning process to perform the annual user access review for FY21. We will continue to collaborate with business units to design more specific roles to align more closely with each user?s role and daily tasks as appropriate. We have made progress toward this end, and anticipate the changes to be complete by December 31, 2021. Estimated Completion Date: December 31, 2021 Contact Person: Lindsey Gardener, Information Technology Telephone: (404) 232-7548; E-mail: Lindsey.Gardener@gdol.ga.gov
See Financial Statement Finding 2020-008. Cause: See Financial Statement Finding 2020-008. Effect: See Financial Statement Finding 2020-008. Recommendation: See Financial Statement Finding 2020-008. Views of Responsible Officials: We concur with the finding. Effect: Inaccurate reports were also filed with the U. S. Department of Labor. GDOL Response: The reports submitted were not inaccurate but compliant with the direction of the USDOL until the pending federal reporting program is implemented for the CARES Act programs. The reports will be updated when the programming is complete as required by USDOL. Due to the lack of controls, there is an increased risk for fraudulent claims and improper benefits paid during the last quarter of fiscal year 2020. GDOL Response: Prior to enactment of the CARES Act programs, GDOL had internal controls to verify identities with the Social Security Administration (SSA) as well as the detection and suspension of payments on accounts where more than two claimants attempted to use the same bank account for direct deposit of unemployment benefits. Additionally, verification of identity is also conducted when claims on filed with a cross match interface with the Georgia Department of Driver Services. The ID.me, identity verification tool, was also implemented in July 2020 initially to require the verification of identity of individuals where suspicious and potential fraudulent activity was detected. Identifying duplicate bank accounts systematically, as well as duplicate email addresses and telephone number were incorporated into the ID.me workflow which automated the process of suspending benefit payments, generating correspondence notifying the claimant to complete an identity verification and update their preferred payment information before payments could resume or be paid for individuals who were not already receiving benefits. Claimants who have an established benefit year end date of July 1, 2019 or later, which includes claims filed March 2020 and forward, were systematically checked to identify claims with duplicate emails, telephone numbers, and bank accounts. Benefits were suspended on impacted claimants and they were notified of necessary actions to resolve these issues including identity verification through ID.me. Affected claimants are provided a timeframe to meet the requirement before benefits are denied by a written determination. This process is now run every night to identify new claims filed meeting the defined criteria for suspicious activity. In January 2021, the Department implemented the Integrity Data Hub (IDH) Identity (ID) Verification exchange as a first level identity verification first to individuals applying for and receiving Pandemic Unemployment Assistance (PUA) and are in the process of phasing in claimants requesting unemployment benefits on all other UI programs. Individuals who do not meet the conditions to satisfy the ID verification requirement are referred to the ID.me process as a secondary, more stringent process to verify identities. Additionally, a staff application is available for staff to identify whether other claims with same contact information to include the mailing and residential addresses exist in the benefits An online fraud reporting system is available and continuously expanded for individuals to report suspicious, fraudulent activity using their personal information without authorization, tips/leads about individuals who may be committing unemployment fraud, and more. Based on the nature of the report, benefits are suspended and an investigation is conducted to determine appropriate next actions by the Department which may include establishing overpayments, imposing fraud penalties, etc. The ability to release eligibility determinations was implemented with the PUA application and processes in April 2020. A denial determination is and will continue to be released when an individual receiving unemployment benefits is later determined not eligible. These claims were documented on a list maintained by the Overpayment Unit until the functionality to establish overpayments became available. When fraudulent activity is detected at any juncture of the claims process, all information available is documented and notice of a work item is sent to the Overpayment Unit to conduct an official investigation for overpayment and/or fraud. Instances involving false information about employment and/or wages result in a redetermination of eligibility, as appropriate, in addition to the overpayment investigation. Unemployment Insurance Program Letter 01-16 states ?in order to be eligible to receive administrative grants, a state must do the following in context of identifying and establishing improper payments?continue to make timely UC payments (if due) and wait to commence recovery of overpayments until an official determination of ineligibility is made?? The overpayment system was implemented February 21, 2021 to accommodate the CARES Act program. In the interim while these programs were being programmed, as overpayments were detected and fraud was identified and investigated, a list of claimants was maintained by the Overpayment Unit. This was to track these activities to ensure fraud and non-fraud determinations will be established in the system when the programming was implemented. Auditor?s Concluding Remarks: The DOL states that the ETA 227 and ETA 902P reports submitted were not inaccurate. While the reports may have agreed to the overpayments data reflected on the DOL?s internal, detailed records, the reports reflect zero balances for overpayments associated with CARES Act UI programs for the periods reviewed. The DOL additionally states amended reports will be submitted supporting the auditors? conclusion that overpayments were not identified appropriately or timely. In addition, as reflected in the finding details and in the DOL?s response within the ?Views of Responsible Officials? above, modifications to the existing overpayment system, which would allow for the identification and tracking of UC overpayments associated with CARES Act programs, were not implemented until February 21, 2021. While the Georgia Department of Audits and Accounts (DOAA) acknowledges that many controls have been implemented to improve the identification, tracking, and reporting of overpayments for the CARES Act UI programs since June 30, 2020, these controls were not implemented until almost eight months after fiscal year-end, and potential overpayments still had not been fully analyzed by the DOL as of the last date of fieldwork. Therefore, the DOAA was unable to gain sufficient appropriate audit evidence to determine the magnitude of the unreported payable and receivable amounts associated with overpayments. Furthermore, the DOL references verbiage reflected in Unemployment Insurance Program Letter (UIPL) No. 01-16 as follows, ?in order to be eligible to receive administrative grants, a state must do the following in context of identifying and establishing improper payments?continue to make timely UC payments (if due) and wait to commence recovery of overpayments until an official determination of ineligibility is made?? This UIPL was issued ?to remind state agencies of the requirements of Federal law pertaining to protecting individual rights in state procedures to prevent or recover unemployment compensation (UC) overpayments.? Therefore, auditors do not believe that the guidance is intended to address the state agencies? obligation to identify overpayments initially but rather their obligation to protect claimants while preventing and recovering overpayments. The fact remains that the DOL did not have adequate procedures in place to make official determinations of ineligibility and overpayments associated with CARES Act UI programs during the period under review or within a reasonable amount of time after fiscal year-end. We reaffirm our finding and will review the status of the DOL?s corrective actions during our next audit.
Show full finding ▾Hide full finding ▴2020-038 Improve Controls over the Identification and Recording of Overpayments Compliance Requirement: Reporting Special Tests and Provisions Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None CFDA Number and Title: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI347102055A13 (Year: 2020) Questioned Costs: None Identified The Georgia Department of Labor did not maintain adequate controls over the identification and recording of benefit overpayments associated with the Unemployment Insurance programs created by the CARES Act. Background Information: See Financial Statement Finding 2020-008. Criteria: See Financial Statement Finding 2020-008. Condition: See Financial Statement Finding 2020-008. Cause: See Financial Statement Finding 2020-008. Effect: See Financial Statement Finding 2020-008. Recommendation: See Financial Statement Finding 2020-008. Views of Responsible Officials: We concur with the finding. Effect: Inaccurate reports were also filed with the U. S. Department of Labor. GDOL Response: The reports submitted were not inaccurate but compliant with the direction of the USDOL until the pending federal reporting program is implemented for the CARES Act programs. The reports will be updated when the programming is complete as required by USDOL. Due to the lack of controls, there is an increased risk for fraudulent claims and improper benefits paid during the last quarter of fiscal year 2020. GDOL Response: Prior to enactment of the CARES Act programs, GDOL had internal controls to verify identities with the Social Security Administration (SSA) as well as the detection and suspension of payments on accounts where more than two claimants attempted to use the same bank account for direct deposit of unemployment benefits. Additionally, verification of identity is also conducted when claims on filed with a cross match interface with the Georgia Department of Driver Services. The ID.me, identity verification tool, was also implemented in July 2020 initially to require the verification of identity of individuals where suspicious and potential fraudulent activity was detected. Identifying duplicate bank accounts systematically, as well as duplicate email addresses and telephone number were incorporated into the ID.me workflow which automated the process of suspending benefit payments, generating correspondence notifying the claimant to complete an identity verification and update their preferred payment information before payments could resume or be paid for individuals who were not already receiving benefits. Claimants who have an established benefit year end date of July 1, 2019 or later, which includes claims filed March 2020 and forward, were systematically checked to identify claims with duplicate emails, telephone numbers, and bank accounts. Benefits were suspended on impacted claimants and they were notified of necessary actions to resolve these issues including identity verification through ID.me. Affected claimants are provided a timeframe to meet the requirement before benefits are denied by a written determination. This process is now run every night to identify new claims filed meeting the defined criteria for suspicious activity. In January 2021, the Department implemented the Integrity Data Hub (IDH) Identity (ID) Verification exchange as a first level identity verification first to individuals applying for and receiving Pandemic Unemployment Assistance (PUA) and are in the process of phasing in claimants requesting unemployment benefits on all other UI programs. Individuals who do not meet the conditions to satisfy the ID verification requirement are referred to the ID.me process as a secondary, more stringent process to verify identities. Additionally, a staff application is available for staff to identify whether other claims with same contact information to include the mailing and residential addresses exist in the benefits An online fraud reporting system is available and continuously expanded for individuals to report suspicious, fraudulent activity using their personal information without authorization, tips/leads about individuals who may be committing unemployment fraud, and more. Based on the nature of the report, benefits are suspended and an investigation is conducted to determine appropriate next actions by the Department which may include establishing overpayments, imposing fraud penalties, etc. The ability to release eligibility determinations was implemented with the PUA application and processes in April 2020. A denial determination is and will continue to be released when an individual receiving unemployment benefits is later determined not eligible. These claims were documented on a list maintained by the Overpayment Unit until the functionality to establish overpayments became available. When fraudulent activity is detected at any juncture of the claims process, all information available is documented and notice of a work item is sent to the Overpayment Unit to conduct an official investigation for overpayment and/or fraud. Instances involving false information about employment and/or wages result in a redetermination of eligibility, as appropriate, in addition to the overpayment investigation. Unemployment Insurance Program Letter 01-16 states ?in order to be eligible to receive administrative grants, a state must do the following in context of identifying and establishing improper payments?continue to make timely UC payments (if due) and wait to commence recovery of overpayments until an official determination of ineligibility is made?? The overpayment system was implemented February 21, 2021 to accommodate the CARES Act program. In the interim while these programs were being programmed, as overpayments were detected and fraud was identified and investigated, a list of claimants was maintained by the Overpayment Unit. This was to track these activities to ensure fraud and non-fraud determinations will be established in the system when the programming was implemented. Auditor?s Concluding Remarks: The DOL states that the ETA 227 and ETA 902P reports submitted were not inaccurate. While the reports may have agreed to the overpayments data reflected on the DOL?s internal, detailed records, the reports reflect zero balances for overpayments associated with CARES Act UI programs for the periods reviewed. The DOL additionally states amended reports will be submitted supporting the auditors? conclusion that overpayments were not identified appropriately or timely. In addition, as reflected in the finding details and in the DOL?s response within the ?Views of Responsible Officials? above, modifications to the existing overpayment system, which would allow for the identification and tracking of UC overpayments associated with CARES Act programs, were not implemented until February 21, 2021. While the Georgia Department of Audits and Accounts (DOAA) acknowledges that many controls have been implemented to improve the identification, tracking, and reporting of overpayments for the CARES Act UI programs since June 30, 2020, these controls were not implemented until almost eight months after fiscal year-end, and potential overpayments still had not been fully analyzed by the DOL as of the last date of fieldwork. Therefore, the DOAA was unable to gain sufficient appropriate audit evidence to determine the magnitude of the unreported payable and receivable amounts associated with overpayments. Furthermore, the DOL references verbiage reflected in Unemployment Insurance Program Letter (UIPL) No. 01-16 as follows, ?in order to be eligible to receive administrative grants, a state must do the following in context of identifying and establishing improper payments?continue to make timely UC payments (if due) and wait to commence recovery of overpayments until an official determination of ineligibility is made?? This UIPL was issued ?to remind state agencies of the requirements of Federal law pertaining to protecting individual rights in state procedures to prevent or recover unemployment compensation (UC) overpayments.? Therefore, auditors do not believe that the guidance is intended to address the state agencies? obligation to identify overpayments initially but rather their obligation to protect claimants while preventing and recovering overpayments. The fact remains that the DOL did not have adequate procedures in place to make official determinations of ineligibility and overpayments associated with CARES Act UI programs during the period under review or within a reasonable amount of time after fiscal year-end. We reaffirm our finding and will review the status of the DOL?s corrective actions during our next audit.
2020-038 Improve Controls over the Identification and Recording of Overpayments Federal Agency: U.S. Department of Labor State Entity: Department of Labor Corrective Action Plans: The system is now in place to track and establish CARES Act overpayments. The list used to maintain a record prior to implementation is processed daily by staff to enter overpayments pending establishment. ETA 227 amended reports will be submitted for first impacted period through the current period at the time of implementation. ETA 902P amended reports will be updated appropriately going forward as overpayments are identified and recorded. GDOL plans to address the recommendations to reconcile the detailed records of overpayments to the general ledger and estimate allowance for doubtful accounts balances. Financial Services will post to the GL as uncollectible the number deemed as `write offs? on the ETA 227 reports generated by the UI program. Estimated Completion Date: June 30, 2021 Contact Person: Crystal Singleton, UI Policy and Procedures Telephone: (404) 232-3183; E-mail: Crystal.Singleton@gdol.ga.gov
Our audit of the UI program revealed deficiencies in the operation of internal controls over the BAM program. We identified a total of 711 paid and denied BAM cases for the fiscal year under review. From this population, a sample of 60 cases was randomly selected for testing using a non-statistical sampling method. The following deficiencies were identified: ? For seven cases, a Summary of Investigation form or narrative was not completed. ? For six cases, a typed Summary of Investigation form was completed, but these forms were not signed or dated, as required. Cause: While DOL has procedures in place for completing a signed and dated Summary of Investigation form for each case file that they review, the cases selected by the auditors for testing were completed during a period of transition in BAM management, which led to the breakdown in the completion of the Summary of Investigation documentation. Effect: The deficiencies in BAM investigation procedures resulted in noncompliance with federal regulations. In addition, though no UC claim decisions associated with the BAM cases tested were found to be inappropriate, failure to perform established quality control procedures may result in benefit payments to ineligible recipients or the denial of benefits to eligible recipients. Furthermore, grant provisions allow the grantor to penalize DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits. Recommendation: The DOL management should strengthen internal controls over BAM investigations to ensure its established policies and procedures are consistently followed and operating effectively. In addition, DOL should develop a plan to address the performance of controls when management transitions occur. Views of Responsible Officials: The Department concurs with this finding.
Show full finding ▾Hide full finding ▴2020-039 Follow Established Controls over the Benefits Accuracy Measurement Program Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None CFDA Number and Title: 17.225 ? Unemployment Insurance 17.225 ? COVID-19 ? Unemployment Insurance Federal Award Number: UI298361755A13 (Year: 2017), UI312881855A13 (Year: 2018), UI325941955A13 (Year: 2019), UI340532055A13 (Year: 2020) Questioned Costs: None Identified The Georgia Department of Labor (DOL) should follow established procedures for the Benefits Accuracy Measurement (BAM) program. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. State UI funds are deposited into the Unemployment Trust Fund (UTF) in the U.S. Treasury, primarily to be used to pay UI program benefits under the federally approved State unemployment law. Accordingly, expenditures of both state and federal unemployment insurance funds are included in the total expenditures for the UI program as reported in the State?s Schedule of Expenditures of Federal Awards (SEFA). Criteria: The BAM program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims unless the State Workforce Agency (SWA) is excepted from such requirement (20 CFR section 602.22). The SWA?s BAM unit is required to draw a weekly sample of payments and denied claims and complete prompt and in-depth case investigations to determine the degree of accuracy and timeliness in the administration of the State UC law and federal programs with respect to benefit determinations, benefit payments, and revenue collections (20 CFR section 602.21(c)). In addition, the BAM State Operations Handbook (ET Handbook No. 395) states on page VI-10 that ?each completed case must contain a Summary of Investigation. Each SWA must develop a format which includes, at a minimum, a narrative that explains the pertinent facts of the case: the basis for any decision that an error was made and any complexities of the case, e.g., difficulty obtaining information, evaluation of statements taken (i.e. how the investigator resolved a conflict in statements or why one party was found to be more credible the other), reasons for delay, or any special circumstances that occurred. Alternately, this may be satisfied by appropriate reference to explanations elsewhere in the case file. The summary should not introduce any new information. In other words, the summary must be substantiated by documentation in the case file. The investigator must sign and date the document.? Furthermore, as a recipient of federal awards, DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance that it is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 CFR 200.303, Subpart D of the Uniform Guidance. Condition: Our audit of the UI program revealed deficiencies in the operation of internal controls over the BAM program. We identified a total of 711 paid and denied BAM cases for the fiscal year under review. From this population, a sample of 60 cases was randomly selected for testing using a non-statistical sampling method. The following deficiencies were identified: ? For seven cases, a Summary of Investigation form or narrative was not completed. ? For six cases, a typed Summary of Investigation form was completed, but these forms were not signed or dated, as required. Cause: While DOL has procedures in place for completing a signed and dated Summary of Investigation form for each case file that they review, the cases selected by the auditors for testing were completed during a period of transition in BAM management, which led to the breakdown in the completion of the Summary of Investigation documentation. Effect: The deficiencies in BAM investigation procedures resulted in noncompliance with federal regulations. In addition, though no UC claim decisions associated with the BAM cases tested were found to be inappropriate, failure to perform established quality control procedures may result in benefit payments to ineligible recipients or the denial of benefits to eligible recipients. Furthermore, grant provisions allow the grantor to penalize DOL for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits. Recommendation: The DOL management should strengthen internal controls over BAM investigations to ensure its established policies and procedures are consistently followed and operating effectively. In addition, DOL should develop a plan to address the performance of controls when management transitions occur. Views of Responsible Officials: The Department concurs with this finding.
2020-039 Follow Established Controls over the Benefits Accuracy Measurement Program Federal Agency: U.S. Department of Labor State Entity: Department of Labor Corrective Action Plans: Since review of the audit sample, the Department has instituted a policy requirement for all auditors to utilize a uniform Summary of Investigation with an electronic signature that must be signed in and included in all cases submitted for a secondary review by another BAM auditor prior to submission to the final reviewer to sign off and close the case. A supervisor manual was developed in January 2021 documenting the responsibilities and will be amended to include the responsibilities of the auditors and ensure instructions and guidelines continue to be followed even during a transition of management. Recently, a new BAM Supervisor assumed this responsibility and is in the process of implementing procedures to ascertain compliance with all federal requirements for the BAM program investigation process. Estimated Completion Date: April 1, 2021 Contact Person: Crystal Singleton, UI Policy and Procedures Telephone: (404) 232-3183; E-mail: Crystal.Singleton@gdol.ga.gov
Our audit of the CRF program revealed deficiencies in the expenditure review process. The process included consideration of requirements and review by both the state agency incurring the expense and the OPB, the defined recipient with responsibility for the administration of the funds. We were told that the internal control review for the allowability of the expenditures consisted of informal conversations that were held between state agencies requesting funds and the OPB; however, this process was not documented, and no evidence was available for review. A total of 162 expenditure transactions were selected for testing using non-statistical sampling methods. Deficiencies were noted through testing as follows: Auditors found that six indirect cost expenditures totaling $219,904 were charged to the program. DOAA does not believe that these types of expenditures satisfy the original requirements of the CRF program as reflected in the CARES Act. Specifically, the CARES Act states that CRF funds must be used for costs that ?are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19).? Further, the CRF FAQ document issued on May 4, 2020 states, ?The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by the COVID-19 public health emergency.? The general nature of indirect costs and the documentation provided does not allow the auditor to determine that these costs were necessary due to the effects of the pandemic. The U.S. Department of the Treasury re-published previously issued guidance in relation to the Coronavirus Relief Fund for States, tribal governments, and certain eligible local governments in Federal Register Notice, Volume 86, Number 10, which states, in part: Payments from the Fund are not administered as part of a traditional grant program and the provisions of the Uniform Guidance, 2 CFR part 200, that are applicable to indirect costs do not apply. Recipients may not apply their indirect costs rates to payments received from the Fund reaffirming our position on the unallowable nature of the aforementioned expenditures. In addition, it was noted upon review of the Financial Progress Report submitted for the period ending June 30, 2020 that while a reconciliation was performed to compare amounts per the accounting records and various supporting documentation to the amounts reflected on the Financial Progress Report, no evidence existed for the review and approval process performed by OPB management when submitting the final Financial Progress Report. Questioned Costs: Known questioned costs of $219,904 were identified for the six unallowable indirect cost expenditures included in the expenditure samples. Using the population of CRF expenditures, which totaled $315,079,890, we project the likely questioned costs to be approximately $1,249,846. Cause: There were no formal internal control review and approval processes documented, as noted above, during the early stages of the Cares program due to the need for a quick response to the public health emergency. Additionally, management asserts that the questioned costs were allowable expenditures under the program guidelines. Effect: If applicable internal controls are not documented and operating appropriately, the OPB increases its risk of unallowable expenditures. The unallowable payments identified by auditors resulted in potential noncompliance with federal regulations and questioned costs. Furthermore, though it does not appear that inappropriate information was transmitted on the Financial Progress Report and published on the PRAC website, this could occur if appropriate review and approval procedures are not documented and functioning properly. Recommendation: The OPB should consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid or if funds can be retained to cover alternative allowable expenditures. Recognizing the need for additional management and internal controls, OPB procured and implemented a grants management system that would provide the capability to collect documentation, to perform expenditure reviews, and to disburse CRF funds to state agencies on a reimbursement basis. The OPB should continue to ensure that internal controls implemented in the newly-established reimbursement system are operating appropriately to provide adequate supporting documentation for all expenditures and review of each expenditure for compliance with grant program requirements. The OPB management should also ensure that evidence of supervisory review and approval of the Financial Progress Report is maintained on-file. Views of Responsible Officials: The Governor?s Office of Planning and Budget (OPB) does not concur with this finding. OPB does not agree with the deficiencies identified in the finding and does not agree with the underlying criteria used by the auditors to determine questioned costs within the CRF program. It is important to note, for perspective, that the first months of this grant that fell during the finding?s audit period, OPB was operating during an unprecedented pandemic emergency. The federal government?s intent was to provide states with the resources necessary to combat the pandemic as quickly as possible; however, the CRF funds were released from the Federal government with very little guidance, except for the broad wording contained in the CARES Act itself. OPB continuously and carefully reviewed guidance as it was released by the federal government while also simultaneously working closely with those State agencies most able to help combat the pandemic to quickly stand-up testing sites, procure personal protective equipment, provide for surge medical needs, amongst other activities. OPB directed those agencies working on these initiatives to record those expenses against the allocated CRF funds as state funds appropriated for FY 2020 were insufficient to meet the level of expense agencies incurred during the emergency. OPB also set up a process to receive and review CRF reimbursement requests using data available through TeamWorks and required budget amendments to be submitted for review and approval within OPB?s Planning and Budget Cloud Services (PBCS) system. Based on OPB?s review of the expenses and federal guidance available at the time the expenses were incurred, OPB did in some instances direct agencies to rerate expenses that were deemed unallowable from CRF to other fund sources. OPB would like to highlight that the reference in the finding to the Federal Register relating to indirect costs is not applicable, as this guidance was not issued until September 2, 2020, which is after both the when the questioned expenses were incurred and after the period under audit. The six indirect costs expenditures totaling $219,904 identified in the finding as questioned costs were recorded by Department of Public Health (DPH) in May or June of 2020. DPH was one of the main agencies combatting this pandemic, and DPH staff was re-directed from other grant programs that have historically generated funds to cover the indirect costs of operating the public health departments. As those activities were temporarily halted, the funding from those programs was not available to cover those ongoing administrative expenses necessary to continue department operations. At the time the expenses were incurred, there was no guidance issued by the grantor indicating that indirect costs would not be reimbursable under the CRF program, and traditionally grants generally allow for reimbursement of some indirect expenses. Therefore, there was no reason for OPB to anticipate indirect costs to later be deemed not reimbursable by the grantor. OPB would like it cited, that the amount of the deficiencies identified in the finding are less than .2% (questioned costs of $219,904 out of $131.7 million tested), and even considering the projected amount, the total error rate is less than .4% (questioned costs of $1.2 million out of $315.1 million received). Additionally, regarding the Financial Progress Report, the Director of Administration and Deputy Director have reviewed each report prior to submission. For perspective, there were numerous factors impacting the report for the period ending June 30, 2020. Specifically, staff that would normally review and approve the reports had to also enter information in the system, as there was very little time to manually enter numerous data fields in a system newly established by the grantor which did not provide a data upload process. Additionally, OPB would like to clarify that other agencies, such as the State Accounting Office, assisted in gathering the underlying data and reconciliation of this report. Auditor?s Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on various State agencies, including the OPB, during the last quarter of fiscal year 2020 due to the effects of the COVID-19 pandemic and the urgent response necessary. Additionally, clarifying guidance associated with the CRF program has been issued in numerous instances since the CARES Act was initially signed into law. While the clarifying guidance specific to indirect cost expenditures was not published until September 2, 2020, the indirect cost expenditures in question were not approved for reimbursement by the OPB until well after this date. Furthermore, the criteria cited within the finding above is the original text from the CARES Act. A reference to the Federal Register notice, which codified the aforementioned guidance associated with indirect cost expenditures, was included within the finding?s condition to provide additional support for the DOAA?s assertion that the initial directives reflected in the CARES Act would not have allowed for the use of CRF monies in this manner. While the known and likely questioned costs identified by the DOAA for unallowable indirect cost expenditures may appear to be insignificant in comparison to the overall CRF program expenditures, the Uniform Guidance Section 200.515 requires auditors to report as audit findings instances in which known and/or likely questioned costs identified in major program testing exceed $25,000. Furthermore, a questioned cost is defined within the Uniform Guidance Section 200.85 as ? a cost that is questioned by the auditor because of an audit finding: (a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award?; (b) Where the costs at the time of the audit, are not supported by adequate documentation; or (c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.? In this case, auditors noted a violation or possible violation of the provisions reflected in the CARES Act and identified costs in excess of $25,000 associated with this violation. As stated within the finding?s condition, auditors were able to review the Financial Progress Report reconciliation performed by the OPB and SAO staff; however, no evidence of supervisory review and approval of this reconciliation or the Financial Progress Report itself was maintained on-file. As reflected in the finding?s criteria, recipients of federal awards are required to establish and maintain effective internal controls over all applicable compliance requirements. Provisions included in the Uniform Guidance Section 200.514 require auditors to test these internal controls, and when internal controls cannot be tested or are deemed ineffective, issue a significant deficiency or material weakness finding. We reaffirm our finding and will review the status of the OPB?s corrective actions during our next audit.
Show full finding ▾Hide full finding ▴2020-040 Improve Internal Controls Activities over the Coronavirus Relief Fund Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of the Treasury CFDA Number and Title: COVID-19 - 21.019 ? Coronavirus Relief Fund Federal Award Number: None Provided (Year: 2020) Questioned Costs: $219,904 The Governor?s Office of Planning and Budget should strengthen internal controls to ensure that appropriate reviews and approvals occur and adequate documentation is maintained for expenditures and reporting related to the Coronavirus Relief Fund. Background Information: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for State, Local, and Tribal governments navigating the impact of the COVID-19 outbreak. Title VI, Section 601 of the CARES Act appropriated $150 billion to States, Tribal governments and units of local government through the establishment of the Coronavirus Relief Fund (CRF). Of this funding, the State of Georgia received $3.5 billion. The Governor?s Office of Planning and Budget (OPB) was designated as the custodian of the CRF funds for the State of Georgia and was charged with reviewing and approving expenditures and disbursing reimbursements for this expenditure activity to the various State agencies. The State of Georgia is also required to report details associated with these expenditures to the U.S. Department of the Treasury?s Office of Inspector General. The information is submitted through the GrantSolutions portal and reflected on the quarterly Financial Progress Report. This data is provided to the Pandemic Response Accountability Committee (PRAC) and published on its website, as well. CRF funds totaling $315.1 million were expended and reported on the State of Georgia?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2020. Criteria: As a recipient of federal awards, the OPB is required to establish and maintain effective internal controls over federal awards that provide reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 ? Internal Controls. Additionally, Title VI, Section 601(d) of the CARES Act as amended by the Consolidated Appropriations Act of 2021 provides guidance for the use of CRF funds and states: A State, Tribal government, and unit of local government shall use the funds provided? to cover only those costs of the State, Tribal government, or unit of local government that ? (1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the budget most recently approved as of the date of enactment of this section for the State or government; and (3) were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021. Condition: Our audit of the CRF program revealed deficiencies in the expenditure review process. The process included consideration of requirements and review by both the state agency incurring the expense and the OPB, the defined recipient with responsibility for the administration of the funds. We were told that the internal control review for the allowability of the expenditures consisted of informal conversations that were held between state agencies requesting funds and the OPB; however, this process was not documented, and no evidence was available for review. A total of 162 expenditure transactions were selected for testing using non-statistical sampling methods. Deficiencies were noted through testing as follows: Auditors found that six indirect cost expenditures totaling $219,904 were charged to the program. DOAA does not believe that these types of expenditures satisfy the original requirements of the CRF program as reflected in the CARES Act. Specifically, the CARES Act states that CRF funds must be used for costs that ?are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19).? Further, the CRF FAQ document issued on May 4, 2020 states, ?The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by the COVID-19 public health emergency.? The general nature of indirect costs and the documentation provided does not allow the auditor to determine that these costs were necessary due to the effects of the pandemic. The U.S. Department of the Treasury re-published previously issued guidance in relation to the Coronavirus Relief Fund for States, tribal governments, and certain eligible local governments in Federal Register Notice, Volume 86, Number 10, which states, in part: Payments from the Fund are not administered as part of a traditional grant program and the provisions of the Uniform Guidance, 2 CFR part 200, that are applicable to indirect costs do not apply. Recipients may not apply their indirect costs rates to payments received from the Fund reaffirming our position on the unallowable nature of the aforementioned expenditures. In addition, it was noted upon review of the Financial Progress Report submitted for the period ending June 30, 2020 that while a reconciliation was performed to compare amounts per the accounting records and various supporting documentation to the amounts reflected on the Financial Progress Report, no evidence existed for the review and approval process performed by OPB management when submitting the final Financial Progress Report. Questioned Costs: Known questioned costs of $219,904 were identified for the six unallowable indirect cost expenditures included in the expenditure samples. Using the population of CRF expenditures, which totaled $315,079,890, we project the likely questioned costs to be approximately $1,249,846. Cause: There were no formal internal control review and approval processes documented, as noted above, during the early stages of the Cares program due to the need for a quick response to the public health emergency. Additionally, management asserts that the questioned costs were allowable expenditures under the program guidelines. Effect: If applicable internal controls are not documented and operating appropriately, the OPB increases its risk of unallowable expenditures. The unallowable payments identified by auditors resulted in potential noncompliance with federal regulations and questioned costs. Furthermore, though it does not appear that inappropriate information was transmitted on the Financial Progress Report and published on the PRAC website, this could occur if appropriate review and approval procedures are not documented and functioning properly. Recommendation: The OPB should consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid or if funds can be retained to cover alternative allowable expenditures. Recognizing the need for additional management and internal controls, OPB procured and implemented a grants management system that would provide the capability to collect documentation, to perform expenditure reviews, and to disburse CRF funds to state agencies on a reimbursement basis. The OPB should continue to ensure that internal controls implemented in the newly-established reimbursement system are operating appropriately to provide adequate supporting documentation for all expenditures and review of each expenditure for compliance with grant program requirements. The OPB management should also ensure that evidence of supervisory review and approval of the Financial Progress Report is maintained on-file. Views of Responsible Officials: The Governor?s Office of Planning and Budget (OPB) does not concur with this finding. OPB does not agree with the deficiencies identified in the finding and does not agree with the underlying criteria used by the auditors to determine questioned costs within the CRF program. It is important to note, for perspective, that the first months of this grant that fell during the finding?s audit period, OPB was operating during an unprecedented pandemic emergency. The federal government?s intent was to provide states with the resources necessary to combat the pandemic as quickly as possible; however, the CRF funds were released from the Federal government with very little guidance, except for the broad wording contained in the CARES Act itself. OPB continuously and carefully reviewed guidance as it was released by the federal government while also simultaneously working closely with those State agencies most able to help combat the pandemic to quickly stand-up testing sites, procure personal protective equipment, provide for surge medical needs, amongst other activities. OPB directed those agencies working on these initiatives to record those expenses against the allocated CRF funds as state funds appropriated for FY 2020 were insufficient to meet the level of expense agencies incurred during the emergency. OPB also set up a process to receive and review CRF reimbursement requests using data available through TeamWorks and required budget amendments to be submitted for review and approval within OPB?s Planning and Budget Cloud Services (PBCS) system. Based on OPB?s review of the expenses and federal guidance available at the time the expenses were incurred, OPB did in some instances direct agencies to rerate expenses that were deemed unallowable from CRF to other fund sources. OPB would like to highlight that the reference in the finding to the Federal Register relating to indirect costs is not applicable, as this guidance was not issued until September 2, 2020, which is after both the when the questioned expenses were incurred and after the period under audit. The six indirect costs expenditures totaling $219,904 identified in the finding as questioned costs were recorded by Department of Public Health (DPH) in May or June of 2020. DPH was one of the main agencies combatting this pandemic, and DPH staff was re-directed from other grant programs that have historically generated funds to cover the indirect costs of operating the public health departments. As those activities were temporarily halted, the funding from those programs was not available to cover those ongoing administrative expenses necessary to continue department operations. At the time the expenses were incurred, there was no guidance issued by the grantor indicating that indirect costs would not be reimbursable under the CRF program, and traditionally grants generally allow for reimbursement of some indirect expenses. Therefore, there was no reason for OPB to anticipate indirect costs to later be deemed not reimbursable by the grantor. OPB would like it cited, that the amount of the deficiencies identified in the finding are less than .2% (questioned costs of $219,904 out of $131.7 million tested), and even considering the projected amount, the total error rate is less than .4% (questioned costs of $1.2 million out of $315.1 million received). Additionally, regarding the Financial Progress Report, the Director of Administration and Deputy Director have reviewed each report prior to submission. For perspective, there were numerous factors impacting the report for the period ending June 30, 2020. Specifically, staff that would normally review and approve the reports had to also enter information in the system, as there was very little time to manually enter numerous data fields in a system newly established by the grantor which did not provide a data upload process. Additionally, OPB would like to clarify that other agencies, such as the State Accounting Office, assisted in gathering the underlying data and reconciliation of this report. Auditor?s Concluding Remarks: The Georgia Department of Audits and Accounts (DOAA) acknowledges the overwhelming burden placed on various State agencies, including the OPB, during the last quarter of fiscal year 2020 due to the effects of the COVID-19 pandemic and the urgent response necessary. Additionally, clarifying guidance associated with the CRF program has been issued in numerous instances since the CARES Act was initially signed into law. While the clarifying guidance specific to indirect cost expenditures was not published until September 2, 2020, the indirect cost expenditures in question were not approved for reimbursement by the OPB until well after this date. Furthermore, the criteria cited within the finding above is the original text from the CARES Act. A reference to the Federal Register notice, which codified the aforementioned guidance associated with indirect cost expenditures, was included within the finding?s condition to provide additional support for the DOAA?s assertion that the initial directives reflected in the CARES Act would not have allowed for the use of CRF monies in this manner. While the known and likely questioned costs identified by the DOAA for unallowable indirect cost expenditures may appear to be insignificant in comparison to the overall CRF program expenditures, the Uniform Guidance Section 200.515 requires auditors to report as audit findings instances in which known and/or likely questioned costs identified in major program testing exceed $25,000. Furthermore, a questioned cost is defined within the Uniform Guidance Section 200.85 as ? a cost that is questioned by the auditor because of an audit finding: (a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award?; (b) Where the costs at the time of the audit, are not supported by adequate documentation; or (c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.? In this case, auditors noted a violation or possible violation of the provisions reflected in the CARES Act and identified costs in excess of $25,000 associated with this violation. As stated within the finding?s condition, auditors were able to review the Financial Progress Report reconciliation performed by the OPB and SAO staff; however, no evidence of supervisory review and approval of this reconciliation or the Financial Progress Report itself was maintained on-file. As reflected in the finding?s criteria, recipients of federal awards are required to establish and maintain effective internal controls over all applicable compliance requirements. Provisions included in the Uniform Guidance Section 200.514 require auditors to test these internal controls, and when internal controls cannot be tested or are deemed ineffective, issue a significant deficiency or material weakness finding. We reaffirm our finding and will review the status of the OPB?s corrective actions during our next audit.
2020-040 Improve Internal Controls Activities over the Coronavirus Relief Fund Federal Agency: U.S. Department of the Treasury State Entity: Office of the Governor Corrective Action Plans: OPB does not agree that the amount is actually questioned costs, and therefore, does not agree the amount needs to be repaid or replaced with other allowable expenditures. Additionally, OPB is allowed to use CRF funds for expenses incurred by December 31, 2021 and can consequently replace this small amount with an alternative expense already incurred if necessary. As indicated in this finding?s recommendations, shortly after the period under audit, OPB implemented a grants management system. This system contains two levels of review for each of the submitted reimbursements requests. Additionally, documentation supporting the reimbursement request is reviewed prior to approval. OPB continues to reconcile information reported to the accounting records and/or the grants management system, and also is maintaining evidence of supervisory review and approval Estimated Completion Date: August 20, 2021 Contact Person: Stephanie Beck, Deputy Director Telephone: 404-656-6507 E-mail: stephanie.beck@opb.georgia.gov
Georgia Institution of Technology?s (?GIT? or the ?Institute?) Department of Internal Audit performed audits on the subcontract, subaward, and subrecipient monitoring process for active subawards related to the fiscal year ended June 30, 2020. The Institute?s Department of Internal Audit selected 40 active subawards in the year ended June 30, 2020, of which 35 were federally funded and 11 met the threshold for a required Single Audit. Out of those 11: ? Four (36%) of the subrecipients did not have either a Single Audit on file or documentation of where a Single Audit was reviewed. ? One subrecipient certified that their Single Audit had not yet been completed and would be ready by a specific date. It was not evident whether the Single Audit was ever received or followed up on. ? One subrecipient certified that their Single Audit had significant deficiencies identified in internal controls over their federal awards program; however, there was a lack of an action plan in place and the Contracting Officer rated the subrecipient as low risk without supporting documentation as to why. ? One subrecipient had findings on their Single Audit regarding procurement and alcohol purchases on federal awards, which is an unallowable cost, and the Contracting Officer rated the subrecipient as low risk without supporting documentation as to why. ? Of the 24 subrecipients that did not require a Single Audit, we noted that 12 did provide documentation or certification including Defense Contract Audit Agency (?DCCAA?) audit reports, Defense Contract Management Agency (?DCMA?) audit reports, third party financial audit reports, or certifications of accounting systems. The remaining 12 certified that they did not require a Single Audit and no other documentation was requested. ? They also noted that the Office of Sponsored Programs? (?OSP?) review of Uniform Guidance Audit Reports were completed during the initial stages of the subaward, but there was no evidence of ongoing review beyond the initial year. ? From a sample of 40 active subawards in FY20, six (15%) did not have a risk assessment and Memorandum of Negotiation on file. Cause: Deficiencies occurred as a result of the following factors: ? Lack of documented procedures and controls to ensure that Uniform Guidance Audit Reports were adequately documented and reviewed. ? Lack of a documented procedure and oversight to follow up on audit reports and findings. ? The OSP Audit Coordinator position was vacant, which led to difficulties in adequately monitoring the growing portfolio of subrecipients. ? Lack of updating website for current Uniform Guidance requirements. Lack of documented procedures and controls to ensure that risk assessments were consistently and adequately conducted. Effect: Subrecipients? expenditures may not be in compliance with federal or grant award provisions. Recommendation: It is recommended that the Institute: ? Document Uniform Guidance Audit requirements for current active subrecipients. ? For those who do not require a Uniform Guidance Audit, request alternative audit reports (i.e., DCAA/DCMA audit, third-party financial audit, etc.) or consider reviewing financial statements or administering audit questionnaires. ? Develop, implement, and document procedures for an initial and annual review of all applicable audit reports going forward as a part of ongoing subrecipient monitoring. ? Revise the ?Subrecipient A-133 Audit Certification Form? to include Uniform Guidance verbiage. ? Update the OSP?s subrecipient monitoring website to present current Uniform Guidance requirements. ? Develop and administer standard weighted risk assessments or risk assessment questionnaires for Contracting Officers to utilize for current active subawards based on factors such as program complexity, percentage passed dollar amount of award, prior experience, audit reports, etc. Views of Responsible Officials: We concur with this finding. See Schedule of Findings and Questioned Costs for chart/table
Show full finding ▾Hide full finding ▴2020-041 Subrecipient Monitoring Compliance Requirement: Subrecipient Monitoring Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: Various ? See Table 2020-041 Pass-Through Entity: None CFDA Number and Title: Various (Research & Development Cluster) ? See Table 2020-041 Federal Award Number: Various ? See Table 2020-041 Award Year: 2015, 2016, 2017, 2018, 2019, 2020 Questioned Costs: None Identified The Georgia Institute of Technology and Georgia Tech Research Corporation did not have effective internal controls in place to ensure that documentation was maintained to evidence compliance with federal regulations related to certain subrecipient monitoring activities. Criteria: As defined in 2 CFR section 200.331, a pass-through entity must (following is not a complete listing): ? Provide required information includes all requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency. ? Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. ? Consider imposing specific subaward conditions upon a subrecipient if appropriate, and ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: Georgia Institution of Technology?s (?GIT? or the ?Institute?) Department of Internal Audit performed audits on the subcontract, subaward, and subrecipient monitoring process for active subawards related to the fiscal year ended June 30, 2020. The Institute?s Department of Internal Audit selected 40 active subawards in the year ended June 30, 2020, of which 35 were federally funded and 11 met the threshold for a required Single Audit. Out of those 11: ? Four (36%) of the subrecipients did not have either a Single Audit on file or documentation of where a Single Audit was reviewed. ? One subrecipient certified that their Single Audit had not yet been completed and would be ready by a specific date. It was not evident whether the Single Audit was ever received or followed up on. ? One subrecipient certified that their Single Audit had significant deficiencies identified in internal controls over their federal awards program; however, there was a lack of an action plan in place and the Contracting Officer rated the subrecipient as low risk without supporting documentation as to why. ? One subrecipient had findings on their Single Audit regarding procurement and alcohol purchases on federal awards, which is an unallowable cost, and the Contracting Officer rated the subrecipient as low risk without supporting documentation as to why. ? Of the 24 subrecipients that did not require a Single Audit, we noted that 12 did provide documentation or certification including Defense Contract Audit Agency (?DCCAA?) audit reports, Defense Contract Management Agency (?DCMA?) audit reports, third party financial audit reports, or certifications of accounting systems. The remaining 12 certified that they did not require a Single Audit and no other documentation was requested. ? They also noted that the Office of Sponsored Programs? (?OSP?) review of Uniform Guidance Audit Reports were completed during the initial stages of the subaward, but there was no evidence of ongoing review beyond the initial year. ? From a sample of 40 active subawards in FY20, six (15%) did not have a risk assessment and Memorandum of Negotiation on file. Cause: Deficiencies occurred as a result of the following factors: ? Lack of documented procedures and controls to ensure that Uniform Guidance Audit Reports were adequately documented and reviewed. ? Lack of a documented procedure and oversight to follow up on audit reports and findings. ? The OSP Audit Coordinator position was vacant, which led to difficulties in adequately monitoring the growing portfolio of subrecipients. ? Lack of updating website for current Uniform Guidance requirements. Lack of documented procedures and controls to ensure that risk assessments were consistently and adequately conducted. Effect: Subrecipients? expenditures may not be in compliance with federal or grant award provisions. Recommendation: It is recommended that the Institute: ? Document Uniform Guidance Audit requirements for current active subrecipients. ? For those who do not require a Uniform Guidance Audit, request alternative audit reports (i.e., DCAA/DCMA audit, third-party financial audit, etc.) or consider reviewing financial statements or administering audit questionnaires. ? Develop, implement, and document procedures for an initial and annual review of all applicable audit reports going forward as a part of ongoing subrecipient monitoring. ? Revise the ?Subrecipient A-133 Audit Certification Form? to include Uniform Guidance verbiage. ? Update the OSP?s subrecipient monitoring website to present current Uniform Guidance requirements. ? Develop and administer standard weighted risk assessments or risk assessment questionnaires for Contracting Officers to utilize for current active subawards based on factors such as program complexity, percentage passed dollar amount of award, prior experience, audit reports, etc. Views of Responsible Officials: We concur with this finding. See Schedule of Findings and Questioned Costs for chart/table
2020-041 Subrecipient Monitoring Federal Agency: Various Federal Agencies: Environmental Protection Agency National Aeronautics & Space Administration National Science Foundation U.S. Agency for International Development U.S. Department of Commerce U.S. Department of Defense U.S. Department of Education U.S. Department of Energy U.S. Department of Homeland Security U.S. Department of Health and Human Services U.S. Department of the Interior U.S. Department of Transportation State Entity: Various State Agencies: Georgia Institute of Technology Georgia Tech Research Corporation Corrective Action Plans: The GIT Office of Sponsored Programs (OSP) plans to submit a critical hire request to the Georgia Tech Office of Human Resources (OHR) and the University System of Georgia (USG) for an audit manager/compliance officer to design and implement a subrecipient monitoring program as required by Uniform Guidance 2 CFR section 200.332. OSP will work with GIT OHR to find the appropriate job description and complete the forms necessary to get the approvals required to post the position. The subrecipient monitoring program will include requesting and reviewing all required reports for current/active subrecipients, requesting alternative reports and analysis for subrecipients that are not required to complete an A-133 audit, implementing a risk analysis program for all future subrecipients, and revising our ?Subrecipient A-133 Audit Certification Form? to include appropriate Uniform Guidance verbiage. OSP has requested an edit from the Office of General Counsel to update GIT Research policy 5.3 with the current threshold of $750,000 for subrecipients required to complete an A-133 audit. OSP will conduct a thorough review of all subaward policies found in the GIT policy library under ?Research? policies 5.0 through 5.4 and edit as necessary to comply with recent updates to 2 CFR part 200 released in November 2020. OSP will request that GIT Purchasing delete its policies regarding subawards and provide a link to the Research policy to ensure that policies are in sync and do not provide conflicting guidance. Estimated Completion Date: June 30, 2021 Contact Person: Rebecca Caravati, Interim VP for Research Administration Telephone: (404) 894-4819; E-mail: rebecca.caravati@osp.gatech.edu
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