Coastal Alabama Community College

Finding 2025-002 – Special Tests and Provisions – Enrollment Reporting (Material Weakness and Noncompliance) Information on the federal program: U.S. Department of Education Student Financial Assistance Cluster Criteria: Under the Pell grant and loan programs, institutions must update the Enrollment Reporting Roster for changes in student status. Each update must include the effective date of the status change, the revised anticipated program completion date, and must be submitted electronically through either the batch reporting method or the National Student Loan Data System (NSLDS) Professional Access website. Institutions are responsible for ensuring timely and accurate reporting, whether performed directly or through a third-party servicer. Reportable changes include reductions or increases in attendance level, withdrawals, graduations, and approved leaves of absence. Condition: We tested a sample of 25 withdrawn students who received financial aid. Eight instances of noncompliance were identified: the enrollment status change for 2 students was not reported to the U.S. Department of Education, and for 6 students the change in status was not reported to the U.S. Department of Education within the required 60‑day timeframe. Cause: The Enrollment Reporting Roster file is not being submitted timely or accurately to report changes in student enrollment status.Effect: The College did not correctly report student status as required under special tests and provisions compliance related to enrollment reporting. Questioned costs: None Recommendation: We recommend the College strengthen its policies and procedures related to enrollment reporting to ensure compliance with federal requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2025-003 – Special Tests and Provisions – Withdrawal Testing (Material Weakness and Noncompliance) Information on the federal program: U.S. Department of Education Student Financial Assistance Cluster Criteria: 34 CFR part 668 establishes rules governing the student withdrawal process including the determination of withdrawal date, calculation of earned Title IV assistance, and return of unearned Title IV aid. Also, when a student withdraws the University must ensure exit counseling is provided to the student within 30 days in accordance with 34 CFR 685.304(b). Condition: We tested a sample of 25 withdrawn students who received financial aid. Two instances of noncompliance were identified: In one instance in which the College did not properly calculate the return of Title IV funds. The College returned $1,749 but they should have only returned $555. There were nine instances in which the College had no documentation that exit counseling was completed nor did they have documentation that the College notified and sent the exit counseling materials to the student within the 30 days as required. Cause: The College did not accurately calculate the amount of aid earned and therefore returned the incorrect amount. The College could not provide documentation that the required exit counseling interviews were completed or the College attempted to contact the borrower to complete the required counseling. Effect: The College did not calculate the amount of aid earned or complete exit counseling for student borrowers under withdrawal compliance requirements. Questioned costs: None Recommendation: We recommend the College strengthen its policies and procedures related to the withdrawal process to comply with withdrawal requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

(Significant Deficiency and Noncompliance) Information on the federal program: U.S. Department of Education Student Financial Aid Cluster Criteria: The College is required to comply with individual program requirements when awarding a student a financial aid package. Federal Pell grants should be calculated in accordance with 34 CFR part 690.63 using the Pell Grant payment schedule and the student’s enrollment status of fulltime, three-quarters time, half-time, or less than half-time. Condition: We tested 40 students for compliance with proper awarding. Out of those 40 tested, 2 students were incorrectly awarded Pell grant funds; 1 student was over awarded and 1 student was under awarded Pell grant funds. Cause: The College did not correctly adjust the amount of Pell grant funds awarded for the semester resulting from an enrollment status change. One student was over awarded $925 and one student was under awarded $925. Effect: The College did not adjust student financial aid packages when these students’ enrollment status changed. Questioned costs: Amounts noted above offset. Recommendation: We recommend the College strengthen its policies and procedures surrounding the packaging and awarding process to ensure compliance with federal requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Reference Number: 2022-002 Compliance Requirement: Reporting Type of Finding: Internal Control and Compliance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Assistance Listing Number(s) and Title: 84.425 ? Higher Education Emergency Relief Fund (HEERF) Federal Awarding Agency: U.S. Department of Education Finding As specified in 2 CFR section 200.303 the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Adequate controls must be in place to ensure proper expenditures are reported in the applicable reporting periods. Adequate controls were not in place to review and approve grant reports for accuracy and completeness of the report prior to their submission to the grantor. Appropriate supporting documentation was not retained in order to reconcile the amounts reported on the HEERF I, II, & III Annual Performance Report Form to the College?s general ledger. Lack of sufficient controls over the review and approval of grant reports to ensure the accuracy and completeness of the report being submitted to the grantor can result in improper reporting which could lead to disallowed costs. However, our audit disclosed no instances of unallowable costs. Further, the HEERF methodology for distributing funds to students was not disclosed on the College?s website. Recommendation We recommend the strengthening of controls to ensure the quarterly grant reports are reviewed and approved for accuracy and completeness prior to submission to the grantor. Views of Responsible Officials of the Auditee The College agrees with Finding 2022-002.

Reference Number: 2021-001 Compliance Requirement: Activities Allowed/Unallowed Type of Finding: Internal Control and Compliance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Assistance Listing Number(s) and Title(s): TRIO Cluster 84.042 TRIO-Student Support Services 84.044 TRIO ? Talent Search 84.047 TRIO ? Upward Bound Federal Awarding Agency: U. S. Department of Education Federal Award Number: P042A200284; P042A200570; P042A200160; P044A170016; P047A170391; P047A170301; P047A170316 Pass-through Entity: None Pass-through Award Number: None Questioned Costs: None Proper supporting documentation was not provided for purchase of student participant food cards. Finding The Code of Federal Regulations, Section 200.403, lists factors affecting the allowability of costs. Among other factors, the section requires that costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Proper documentation of costs helps minimize the possibility that errors or irregularities, including misappropriations and fraud could occur and not be detected. In addition, the Alabama Community College System Fiscal Procedures Manual describes the process that should be used when making purchases. The procedures described include properly requesting a purchase order and receiving merchandise prior to the payment for the items purchased. During the year, the College received a grant award under the Upward Bound Program, Assistance Listing Number 84.047, with a budget indicating that $43,000 would be allocated to the purchase of food gift cards for participants in the program. On December 10, 2020, the College direct deposited Upward Bound program funds in the amount of $4,250 to an employee?s personal checking account for the purchase of student participant food cards. Documentation revealed that the College requested documentation of the purchase of the food cards from the employee multiple times over the next year. Despite the attempts to obtain proper documentation, receipts were never provided by the employee for the purchase of the food cards. The College did not follow its normal purchase procedures which would have required documentation of the receipt of merchandise and documentation of costs of the items purchased prior to the release of funds. This allowed an employee to receive and hold $4,250 in Upward Bound program funds for almost a year without purchasing the budgeted food cards. Subsequently, the College requested the funds to be repaid by the employee. The employee repaid the funds on November 4, 2021, and separated service from the College on February 28, 2022. Recommendation The College should ensure that federal program costs are adequately documented prior to the release of program funds and that the procedures for purchases described in the Alabama Community College System Fiscal Procedures Manual are followed. Views of Responsible Officials of the Auditee Coastal Alabama Community College does not agree to the Finding 2021-001. Auditor?s Response to Views of Responsible Officials We appreciate the College?s response. All correspondence was reviewed during the audit, and we agree that approval was received for the purchase of meal cards. However, this finding is related to transferring funds to an employee?s personal bank account for the purchase of meal cards, which did not occur. In addition, the College did not obtain reimbursement from the employee until almost a year later. We reaffirm our finding.

Reference Number: 2021-002 Compliance Requirement: Reporting Type of Finding: Internal Control Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Assistance Listing Number(s) and Title(s): 84.425 ? Higher Education Emergency Relief Fund (HEERF) Federal Awarding Agency: U. S. Department of Education Federal Award Number: P425F203710; P425E202401 Pass-through Entity: None Pass-through Award Number: None Questioned Costs: None The College failed to report all expenses and to submit timely the required quarterly reports and annual report due for HEERF reporting. Finding The Coronavirus Aid, Relief, and Economic Security (CARES) Act, Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), and the American Rescue Plan (ARP) established and funded the Higher Education Emergency Relief Fund (HEERF). The reporting requirements for HEERF funding include a Quarterly Budget and Expenditure Report (QBER). Expenditures of awards funded by HEERF I, II, III Sections 18004(a)(1) Institutional Portion, 18004(a)(2), and 18004(a)(3) should be reported using the QBER form developed by the grantor. The form is required to be posted on the institution?s primary website. The College was awarded an Institutional Portion grant under 18004(a)(1). Each of the College's quarterly reports during the fiscal year were selected for review. Audit tests revealed that the college failed to report $4,178,745.97 of lost revenues claimed from the (ARP) HEERF III Institutional portion. Quarterly reports were not submitted by the due dates for quarters ended December 31, 2020, March 31, 2021, and June 30, 2021, but instead were submitted with the September 31, 2021, quarterly report which was posted timely. The first annual performance report was which was due on February 28, 2021, was not submitted until March 17, 2021. The College did not have controls in place to ensure that report was accurate and submitted in a timely manner. Recommendation The College should ensure that adequate controls are in place to ensure compliance with the federal reporting requirements for reporting of expenses and timely submission of Quarterly Budget and Expenditure Report and submission of the annual performance report. Views of Responsible Officials of the Auditee Coastal Alabama Community College does agree to Finding 2021-002.