Peralta Community College District

Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.303, nonfederal entities 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. Condition / Context: During our audit procedures, we noted that a formal documented review process was not available for the following areas at two of the District’s four colleges:  R2T4 calculations (two colleges)  Student award packaging (one college)  Students selected for verification by the Department of Education (one college) Questioned Costs: None. Cause: The Colleges' Financial Aid Director positions were vacant in early 2022-23, resulting in an oversight. Effect: A lack of internal controls can result in noncompliance with provisions of the various programs within the Student Financial Assistance Cluster. Repeat Finding: See prior year finding 2022-002. Recommendation: We recommend the Colleges reinforce their review processes, monitor proper follow-up on audit findings, and review all activity level controls to ensure compliance with the various requirements of the Student Financial Assistance Cluster. Action taken in response to finding: The District continues to enlist the assistance of Huron and other vendors to assess our internal controls over financial aid federal awards. The district collaborates with external entities to engage in comprehensive training to district-wide staff involved in student financial aid processing. College FA staff are sent regular reminders to reconcile and perform R2T4 calculations. Management is actively recruiting to fill vacant positions in this area across the district. Planned completion date for corrective action plan: June 30, 2024.

Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 34 CFR 668.164(l), an institution must return to ED (notwithstanding any state law, such as a law that allows funds to escheat to the state) any Title IV funds, except FWS program funds, that it attempts to disburse directly to a student or parent but they do not receive or negotiate those funds. For FWS program funds, the institution is required to return only the federal portion of the payroll disbursements. If the institution attempted to disburse the funds by check and the check is not cashed, the funds must be returned no later than 240 days after the date it issued the check. If a check is returned, or an EFT is rejected, the institution may make additional attempts to disburse the funds, provided that the attempts are made no later than 45 days after the funds were returned or rejected. If the institution does not make an additional attempt to disburse the funds, the funds must be returned before the end of the 45-day period and no later than 240 days from the date of the initial attempt to disburse the funds. Condition / Context: Four (4) out of a sample of 25 outstanding refund checks tested were returned to the U.S. Department of Education after aging past the 240-day requirement. Questioned Costs: $5,826.99 Cause: Following the District’s receipt of refund checks, we noted that there is not a process for ensuring all checks are remitted back to the U.S. Department of Education within the 240-day requirement period. Effect: The District is not in compliance with the applicable Title IV regulations stating that all student refund checks that are outstanding for more than 240 days be returned to the U.S. Department of Education. Repeat Finding: See prior year finding 2022-004. Recommendation: We recommend that the District review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education or disbursed to students as stated in the criteria mentioned above. Action taken in response to finding: The district in collaboration with the colleges has established procedures, notification protocols, adjusted business processes and trained financial aid staff over the past year to address this audit finding. The District will continue to work closely with each college to return funds to the Department of Education in a timely manner. Query reports have been created to identify funds to be slated for return. This effort is monitored on a regular basis by the college Dean of Student Services and their Business Service Office. Planned completion date for corrective action plan: March 31, 2024.

FINDING #2022 ? 002: INTERNAL CONTROLS OVER FEDERAL AWARDS Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.303, nonfederal entities 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. Condition / Context: During our audit procedures, we noted that a formal documented review process was not available for the following areas: ? R2T4 calculations [Berkeley City College and Merritt College] ? Student award packaging [Merritt College] ? Students selected for verification by the Department of Education [Merritt College] Furthermore, because the Financial Aid Director positions were vacant, reconciliations performed by the loan officers were not reviewed for: ? Pell Grant and Supplemental Education Opportunity Grant [Berkeley and Merritt College] ? Direct Loan [Berkeley City College] Questioned Costs: None. Cause: The Colleges' Financial Aid Director positions were vacant at June 30, 2022, resulting in an oversight. Effect: A lack of internal controls can result in noncompliance with provisions of the various programs within the Student Financial Assistance Cluster. Repeat Finding: See prior year finding 2021-004. Recommendation: We recommend the Colleges reinforce their review processes, monitor proper follow-up on audit findings, and review all activity level controls to ensure compliance with the various requirements of the Student Financial Assistance Cluster.Action taken in response to finding: The district has entered into a contract with Huron Consulting Group to address internal controls pertaining to reconciliation of Title IV funds, R2T4 processing, award packaging and verification. Huron has created more robust packaging and disbursement rules to ensure only eligible students are awarded and paid. Additionally, the district has created business processes and procedures to improve internal controls over federal awards. While the cutoff date for the audit was missed for the 2021-2022 school year, corrective actions have been taken to ensure the reconciliation of Title IV funds and secondary reviews have been completed and are currently underway for 2022-2023. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Planned completion date for corrective action plan: June 30, 2023.

Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 34 CFR680.309(b) and the National Student Loan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education, schools must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. In addition, schools must report enrollment status changes within 30 days of becoming aware of the status change or in its next scheduled enrollment submission if the scheduled submission is within 60 days. Condition / Context: During our testing of 25 students, which is a statistically valid sample, we noted one (1) instance of a student status change failing to be reported to NSLDS. Questioned Costs: None. Cause: Unknown, the status was correctly submitted to the Federal Clearinghouse but failed to automatically `push? or report to NSLDS. Effect: The case identified resulted in noncompliance with the applicable Title IV regulations. Inaccurate information is reflected on the NSLDS database. A student?s enrollment data protects the rights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data, ensures loan repayment dates are accurately based on the last data of attendance, allows in-school deferments to be automatically granted using NSLDS enrollment data, and provides vast amounts of critical data about the effectiveness of Title IV aid programs, including completion data. Repeat Finding: See prior year finding 2021-005. Recommendation: We recommend the District engage with the Clearinghouse to review applicable reporting procedures to ensure that enrollment and program information is accurately and timely reported to NSLDS as required by regulations. Action taken in response to finding: The District Administration & Records will perform a study of the current business processes to identify data discrepancies. The District will engage the Clearinghouse and review the applicable reporting procedures with the financial aid offices to ensure sound internal controls over reporting and updating of NSLDS enrollment data. Planned completion date for corrective action plan: June 30, 2023.

Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 34 CFR 668.164(l), an institution must return to ED (notwithstanding any state law, such as a law that allows funds to escheat to the state) any Title IV funds, except FWS program funds, that it attempts to disburse directly to a student or parent but they do not receive or negotiate those funds. For FWS program funds, the institution is required to return only the federal portion of the payroll disbursements. If the institution attempted to disburse the funds by check and the check is not cashed, the funds must be returned no later than 240 days after the date it issued the check. If a check is returned, or an EFT is rejected, the institution may make additional attempts to disburse the funds, provided that the attempts are made no later than 45 days after the funds were returned or rejected. If the institution does not make an additional attempt to disburse the funds, the funds must be returned before the end of the 45-day period and no later than 240 days from the date of the initial attempt to disburse the funds. Condition / Context: Ten (10) out of a sample of 25 outstanding refund checks tested were yet not returned to the U.S. Department of Education. Eight (8) of the ten (10) had aged past the 240-day requirement. Questioned Costs: $7,408.87 Cause: Following the District?s receipt of refund checks, we noted that there is not a process for making contact with students within the initial 45-day period to resolve issues. Likewise, we noted there is not a process to ensure checks outside of the 45-day period are remitted back to ED. Effect: The District is not in compliance with the applicable Title IV regulations stating that all student refund checks that are outstanding for more than 240 days be returned to the U.S. Department of Education. Any additional attempts to disburse funds must be made no later than 45 days after the funds were returned or rejected. Repeat Finding: See prior year finding 2021-006. Recommendation: We recommend that the District review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education or disbursed to students as stated in the criteria mentioned above. Action taken in response to finding: The district has entered into a contract with Huron Consulting Group to address the internal controls pertaining to returning funds and reissuing funds back to students. District Finance has been working closely with each College to return funds to the Department of Education. Queries have been created to identify returned checks which will be monitored on a regular basis to reverse financial aid disbursements and re-report changes to COD. Planned completion date for corrective action plan: March 31, 2023.

2021 ? 002: Special Tests and Provisions: COD ReportingFederal Agency: U.S. Department of EducationFederal Program Title: Student Financial Assistance ClusterAssistance Listing Number: 84.063 and 84.268Award Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: The Department of Education requires the Colleges to report and ensure that the disbursement information reported to the Common Origination and Disbursement (COD) system is accurate and within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student.Condition / Context: During our audit of 60 Pell grant student disbursement and 60 Direct Loan student disbursements, the audit identified the following conditions:Alameda Berkeley Laney MerrittPell Disbursements (15 samples tested at each college)Incorrect dates 02 2 2Not timely 1 6 2 0Incorrect amounts 0 0 0 2Direct Loan Disbursements (15 samples tested at each college)Incorrect dates 1 5 15 10Not timely 6 0 4 0Incorrect amounts 0 0 0 0Questioned Costs: None.Cause: The Colleges? experienced turnover in key positions accountable for internal controls and compliance during and subsequent to year-end.Effect: The case identified resulted in noncompliance with the applicable Title IV regulations. Student interest accrues based on the disbursement date reported to COD, thus the interest calculation could be skewed due to the discrepancy in disbursement dates reported.Repeat Finding: See prior year finding 2020-005.Recommendation: We recommend the Colleges' review their reporting procedures and policies around reporting Pell and Direct Loan disbursements to COD to ensure that student information is reported accurately and timely to COD as required by regulations.Views of Responsible Officials: Please refer to the attached corrective action plan.

2021 ? 003: Gramm-Leach-Bliley Act ? Student Information SecurityFederal Agency: U.S. Department of EducationFederal Program Title: Student Financial Assistance ClusterAssistance Listing Number: 84.007, 84.033, 84.063 and 84.268Award Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: The Gramm-Leach-Bliley Act (Pub. L. No. 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as ?financial institutions? and subject to the Gramm-Leach-Bliley Act because they appear to be significantly engaged in wiring funds to consumers (16 CFR 313.3(k)(2)(vi)). Under an institution?s Program Participation Agreement with the ED and the Gramm-Leach-Bliley Act, institutions must protect student financial aid information, with particular attention to information provided to institutions by ED or otherwise obtained in support of the administration of the federal student financial aid programs.Condition / Context: During our audit procedures, we noted that the District performed a data integrity assessment during the year, however this assessment did not address the three required areas noted in 16 CFR 314.4 (b) which are (Area 1) Employee training and management; (Area 2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (Area 3) Detecting, preventing and responding to attacks, intrusions, or other systems failures.The District took measures to assure required risks were addressed, including the three areas listed above, safety measures were significantly enhanced to protect the district throughout the past two years. These safety measures included moving all our data systems to the Cloud through Oracle, and Oracle is contracted to house, protect, and ensure the safety of all of our data. This protection naturally encompassed (Area 1) Employee training and management, and (Area 2) Information systems, including network and software design. In 2021 the district also established disaster recovery sites for all our data and processes to secure and protect against any attacks, intrusions, or other system failures listed in Area 3.Questioned Costs: None.Cause: The District did not perform a formal IT risk assessment as required by the Gramm-Leach-Bliley Act. Due to the covid pandemic, the formal IT risk assessment for the Peralta District was halted for the past two years.Effect: The case identified resulted in noncompliance with the applicable Title IV regulations. The student personal information could be vulnerable.Repeat Finding: See prior year finding 2020-006.Recommendation: We recommend that the District engage a third party to perform the risk assessment for the three required areas required by the Gramm-Leach-Bliley Act.Views of Responsible Officials: Please refer to the attached corrective action plan.

2021 ? 004: Internal Controls Over Federal AwardsFederal Agency: U.S. Department of EducationFederal Program Title: Student Financial Assistance ClusterAssistance Listing Number: 84.007, 84.033, 84.063 and 84.268Award Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: In accordance with 2 CFR 200.303, nonfederal entities 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.Condition / Context: During our audit procedures, we noted that a formal documented review process was not available for the following areas:? R2T4 calculations [Berkeley City College and Merritt College]? Student award packaging [Merritt College]? Students selected for verification by the Department of Education [Merritt College]Furthermore, because the Financial Aid Director positions were vacant, reconciliations performed by the loan officers were not reviewed for:? Pell Grant and Supplemental Education Opportunity Grant [Berkeley and Merritt College]? Direct Loan [Berkeley City College]Questioned Costs: None.Cause: The Colleges' Financial Aid Director positions were vacant subsequently resulting in an oversight.Effect: A lack of internal controls can result in noncompliance with provisions of the various programs within the Student Financial Assistance Cluster.Repeat Finding: See prior year finding 2020-007.Recommendation: We recommend the Colleges reinforce their review processes, monitor proper follow-up on audit findings, and review all activity level controls to ensure compliance with the various requirements of the Student Financial Assistance Cluster.Views of Responsible Officials: Please refer to the attached corrective action plan.

2021 ? 005: Special Tests and Provisions: NSLDS Enrollment ReportingFederal Agency: U.S. Department of EducationFederal Program Title: Student Financial Assistance ClusterAssistance Listing Number: 84.007, 84.033, 84.063 and 84.268Award Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: In accordance with 34 CFR680.309(b) and the National Student Loan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education, schools must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. In addition, schools must report enrollment status changes within 30 days of becoming aware of the status change or in its next scheduled enrollment submission if the scheduled submission is within 60 days.Condition / Context: During our testing of 60 students, which is a statistically valid sample, we noted 2 instances of late reporting of student status changes, 5 instances of improper student status reporting at the campus-level and program-level records including 4 students that were not updated to graduated from withdrawn, 2 instances where the effective date of a student status change was improperly reported at both the campus-level and program-level record, 2 instances where the effective date of a student status change was improperly reported at the campus-level record, and 1 instance where the student program was incorrectly reported to NSLDS. And we noted that 10 out of the 60 students, which is a statistically valid sample, tested did not have the correct program begin date per the institution's record reported to the NSLDS system.Questioned Costs: None.Cause: The Colleges? experienced turnover in key positions accountable for internal controls and compliance during and subsequent to year-end.Effect: The case identified resulted in noncompliance with the applicable Title IV regulations. Inaccurate information is reflected on the NSLDS database. A student?s enrollment data protects the rights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data, ensures loan repayment dates are accurately based on the last data of attendance, allows in-school deferments to be automatically granted using NSLDS enrollment data, and provides vast amounts of critical data about the effectiveness of Title IV aid programs, including completion data.Repeat Finding: See prior year finding 2020-008.Recommendation: We recommend the District review its reporting procedures to ensure that enrollment and program information is accurately and timely reported to NSLDS as required by regulations.Views of Responsible Officials: Please refer to the attached corrective action plan.

2021 ? 006: Outstanding Student Refund Checks Federal Agency: U.S. Department of EducationFederal Program Title: Student Financial Assistance ClusterAssistance Listing Number: 84.007, 84.033, 84.063 and 84.268Award Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: In accordance with 34 CFR 668.164(l), an institution must return to ED (notwithstanding any state law, such as a law that allows funds to escheat to the state) any Title IV funds, except FWS program funds, that it attempts to disburse directly to a student or parent but they do not receive or negotiate those funds. For FWS program funds, the institution is required to return only the federal portion of the payroll disbursements. If the institution attempted to disburse the funds by check and the check is not cashed, the funds must be returned no later than 240 days after the date it issued the check. If a check is returned, or an EFT is rejected, the institution may make additional attempts to disburse the funds, provided that the attempts are made no later than 45 days after the funds were returned or rejected. If the institution does not make an additional attempt to disburse the funds, the funds must be returned before the end of the 45-day period and no later than 240 days from the date of the initial attempt to disburse the funds.Condition / Context: The 45 outstanding refund checks tested were yet not returned to the U.S. Department of Education.Questioned Costs: $23,782.Cause: The Districts' internal controls did not identify the errors for compliance with the criteria mentioned above.Effect: The District is not in compliance with the applicable Title IV regulations stating that all student refund checks that are outstanding for more than 240 days be returned to the U.S. Department of Education. Any additional attempts to disburse funds must be made no later than 45 days after the funds were returned or rejected.Repeat Finding: See prior year finding 2020-009.Recommendation: We recommend that the District review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education or disbursed to students as stated in the criteria mentioned above.Views of Responsible Officials: Please refer to the attached corrective action plan.

2021 ? 007: Return of Title IV Funds Federal Agency: U.S. Department of EducationFederal Program Title: Student Financial Assistance ClusterAssistance Listing Number: 84.063, 84.268Award Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: In accordance with 34 CFR 668.22(a)(1) and 34 CFR 668.22(j), when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student?s withdrawal date and an institution must return the amount of unearned title IV funds as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew.In addition, Title IV funds may be expended only towards the education of the students who can be proven to have been in attendance at the institution. In a distance education context, documenting that a student has logged into an online distance education platform or system is not sufficient, by itself, to demonstrate attendance by the student. To avoid returning all funds for a student that did not begin attendance, an institution must be able to document ?attendance at any class.? To qualify as a last date of attendance for Return of Title IV purposes, an institution must demonstrate that a student participated in class or was otherwise engaged in an academically related activity, such as by contributing to an online discussion or initiating contact with a faculty member to ask a course-related question.Condition / Context: During our testing of 40 students, which is a statistically valid sample, we noted 1 instance at Berkeley City College and 2 instances at Laney College where the Colleges? failed to return title IV funds within 45 days of the date the institution determined that the students withdrew; 1 instance at Merritt College where the College failed to input the amount disbursed to the student during the term resulting in an incorrect R2T4 calculation and the College not returning the amount of unearned title IV funds to the Department of Education; and 3 instances at Laney College where the College returned the incorrect amount of unearned title IV funds to the Department of Education.In addition, we noted 8 students for Alameda College and 4 students for Laney College who did not academically participate in the enrolled distance education courses prior to withdrawing from their respective term. Students are required to academically participate in the enrolled distance education courses in order to earn the Title IV aid.Questioned Costs: None.

2021 ? 008: Activities Allowed or Unallowed and Allowable Cost/Cost Principles Federal Agency: Department of EducationFederal Program Title: Higher Education Emergency Relief Fund (HEERF) Institutional Aid PortionAssistance Listing Number: 84.425FAward Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control Over Compliance and NoncomplianceCriteria or Specific Requirement: Institutions must demonstrate that costs incurred are allowable under the relevant statutory provisions and consistent with the purpose of the ESF ?to prevent, prepare for, and respond to coronavirus.? In general, the CARES Act authorized broad uses of HEERF funds, with specific standards for the different subprograms. The CRRSAA expanded the allowable uses for supplemental awards and new awards made under Section 314(a)(1) of the CRRSAA. The expanded use of funds authority also applies to unexpended HEERF I funds as of December 27, 2020 (the date of enactment of the CRRSAA).Condition / Context: During our testing of 24 non-payroll transactions, we noted 2 non-payroll transactions were not allowable.Questioned Costs: $8,278Cause: The District?s internal controls did not ensure compliance with the requirements with the criteria mentioned above.Effect: The documentation available for review was not adequate to support the compliance with the activities allowed/unallowed and allowable costs/cost principles to the program.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the District improve the existing procedures and controls to ensure compliance with the aforementioned criteria such as having an additional level of review by managements or an internal auditor. Also, we recommend the District improve the review process by maintaining adequate documentation to support all charges to new and existing federal programs.Views of Responsible Officials: Please refer to the attached Corrective Action Plan.

2021 ? 009: Higher Education Emergency Relief Fund (HEERF) Reporting Federal Agency: Department of EducationFederal Program Title: Higher Education Emergency Relief Fund (HEERF) Student Aid Portion and Higher Education Emergency Relief Fund (HEERF) Institutional Aid PortionAssistance Listing Numbers: 84.425F; 84.425EAward Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control Over Compliance and NoncomplianceCriteria or Specific Requirement: In Compliance Supplement issued by Executive Office of the President Office of Management and Budget in July 2021, there is a quarterly public reporting requirement for Students Aid and Institutional portions under section ?ESF ? Elementary and Secondary?.In addition, there are requirements for all HEERF grantees to submit and file Annual Reporting. Department of Education (DE) developed the HEERF Data Collection Form (OMB Control Number 1840-0850) that institutions must have used to satisfy the annual reporting requirement for HEERF I. The form was required to be submitted to ED via the Annual Report Data Collection System on February 8, 2021 and applied to the reporting period from March 13, 2020 through December 31, 2020. Auditors should sample the amounts and data reported in the 2020 report with underlying documentation to ensure accuracy. ED will be collecting an annual report for HEERF grantees in February 2022. ED will share more information regarding this annual report, which will require institutions to report on their uses of HEERF I CARES Act funds, HEERF II CRRSAA funds, and HEERF III ARP funds in advance of the ARP annual reporting deadline.Condition / Context: During our testing of 5 out of 5 reports, the quarterly student report was not updated and published on the College?s website.During our testing of 5 quarterly institutional reports from Alameda College, Berkeley City College, Laney College and Merritt College, we noted 4 quarterly report (one from each College) were not published to the website timely.During our testing of 2 annual reports from Berkeley College and Merritt College, we were unable to obtain the supporting documentation of the numbers reported on the report listed below:? Count of HEERF Emergency Financial Aid Grant Eligible Students? Count of HEERF Emergency Financial Aid Grants Disbursed to Students? Total of HEERF Emergency Financial Aid Grants Disbursed to Students? Institutional Expenditures of (a)1, (a)2, and a(3) through December 31, 2020Questioned Costs: NoneCause: The College was not aware of this compliance requirement.Effect: The case identified resulted in noncompliance with the HEERF reporting compliance requirements.Repeat Finding: This is not a repeat finding.Recommendation: We recommend the College to put a process in place to ensure compliance with the HEERF reporting.Views of Responsible Officials: Please refer to the attached Corrective Action Plan.

2021 ? 010: Suspension and Debarment Federal Agency: Department of EducationFederal Program Title: Higher Education Emergency Relief Fund (HEERF) Institutional Aid PortionAssistance Listing Number: 84.425FAward Period: July 1, 2020 to June 30, 2021Type of Finding: Significant Deficiency in Internal Control Over Compliance and NoncomplianceCriteria or Specific Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215.When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.beta.sam.gov/ (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300).Condition / Context: For nine procurement transactions (4 HEERF and 5 R&D), we requested audit evidence supporting the District verified that the vendors in the sample were not suspended or debarred or otherwise excluded from participating in the transaction prior to procurement with the vendor. The District?s policy is to check the system for Award Management (SAM) Exclusions website, print a screen shot, and timestamp the information showing the procedure was performed. Other possible eligible audit evidence included collecting a certification from the vendor or adding a clause or condition to the covered transaction contract with that entity. While the District verbally confirmed that it verified vendors are not suspended or debarred prior to the procurement transaction by checking the SAM website, there was no audit evidence that we could observe that verified these procedures were performed. At the time of the audit (versus at the time of procurement), the District did print SAM screenshots to demonstrate to us that the entities sampled are not on the SAM Exclusions list. We also verified that the selected entities are not suspended or debarred.Questioned Costs: NoneCause: CLA?s adherence to auditing standards require audit evidence to demonstrate that the District?s purchasing team performed the verification. The District was not maintaining support that the verification was being performed and verbal confirmation by the District did not serve as proper audit evidence.Effect: Non-compliance with federal regulations.Repeat Finding: This is not a repeat finding.Recommendation: We recommend the District retain document to evidence its compliance with the suspension and debarment standards as required by federal regulations.Views of Responsible Officials: Please refer to the attached Corrective Action Plan.

2020 ? 004: Special Tests and Provisions: Eligibility and Certification Approval ReportFederal Agency: Department of EducationFederal Program Title: Student Federal Assistance ClusterCFDA Number: 84.007, 84.033, 84.063 and 84.268Award Period: July 1, 2019 to June 30, 2020Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: According to 34 CFR Section 600.21(a), changes in chief executiveofficers or program administrators listed on the Eligibility and Certification Approval (ECAR) Reportshould be reported to the Department of Education within 10 days of the change.Condition / Context: During our audit procedures, we noted that the new Presidents and Directors ofFinancial Aid for Laney, Alameda, and Merritt College were not reported to the Department ofEducation within 10 business days of the change.Questioned Costs: NoneCause: The Colleges' internal controls did not ensure compliance with the criteria mentioned above.Effect: The case identified resulted in noncompliance with the applicable ECAR reportingrequirements.Repeat Finding: This is not a repeat finding.Recommendation: We recommend the Colleges? establish procedures to ensure the timely reportingof ECAR changes to the Department of Education.

2020 ? 005: Special Tests and Provisions: COD ReportingFederal Agency: Department of EducationFederal Program Title: Student Federal Assistance ClusterCFDA Number: 84.063 and 84.268Award Period: July 1, 2019 to June 30, 2020Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: The Department of Education requires the Colleges to report andensure that the disbursement dates reported to the Common Origination and Disbursement (COD)system are within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309)funds to a student.Condition / Context: The audit identified the following conditions:(1) 2 out of the 15 Direct Loan disbursements, which is a statistically valid sample, tested forBerkeley College and 4 out of the 15 Pell Grant disbursements tested for Laney College, hadincorrect disbursement dates reported to the Common Origination and Disbursement (COD)system.(2) 2 out of the 15 Direct Loan disbursements, which is a statistically valid sample, tested for LaneyCollege were not reported to COD within the required 15 days.Questioned Costs: NoneCause: The Colleges' internal controls did not ensure compliance with the criteria mentioned above.Effect: The case identified resulted in noncompliance with the applicable Title IV regulations. Studentinterest accrues based on the disbursement date reported to COD, thus the interest calculation couldbe skewed due to the discrepancy in disbursement dates reported.Repeat Finding: See prior year finding 2019-007.Recommendation: We recommend the Colleges' evaluate their procedures and policies aroundreporting Pell and Direct Loan disbursements to COD to ensure that student information is reportedaccurately and timely.

2020 ? 006: Gramm-Leach-Bliley ActFederal Agency: Department of EducationFederal Program Title: Student Federal Assistance ClusterCFDA Number: 84.007, 84.033, 84.063 and 84.268Award Period: July 1, 2019 to June 30, 2020Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requiresfinancial institutions to explain their information-sharing practices to their customers and to safeguardsensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions thatparticipate in Title IV Educational Assistance Programs as ?financial institutions? and subject to theGramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Under an institution?s Program ParticipationAgreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protectstudent financial aid information, with particular attention to information provided to institutions by theDepartment or otherwise obtained in support of the administration of the federal student financial aidprograms.Condition / Context: During our audit procedures, we noted that the College did not perform a riskassessment that addresses two of the three areas noted in 16 CFR 314.4 (b) which are (Area 1)Employee training and management; (Area 3) Detecting, preventing and responding to attacks,intrusions, or other systems failures and document safeguards for identified risks.Questioned Costs: NoneCause: The District did not perform an IT risk assessment to identify risks and address risks identifiedas required by the Gramm-Leach-Bliley Act.Effect: The case identified resulted in noncompliance with the applicable Title IV regulations. Thestudent personal information could be vulnerable.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the District engage a third party or perform the riskassessment to address the areas required by the Gramm-Leach-Bliley Act and ensure that there aredocumented safeguards for identified risks.

2020 ? 007: Internal Controls Over Federal AwardsFederal Agency: Department of EducationFederal Program Title: Student Federal Assistance ClusterCFDA Number: 84.007, 84.033, 84.063 and 84.268Award Period: July 1, 2019 to June 30, 2020Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: According to 2 CFR 200.303, nonfederal entities must establishand maintain effective internal control over the Federal award that provides reasonable assurance thatthe non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,and the terms and conditions of the Federal award.Condition / Context: During our audit procedures, we noted that there is no formal documented reviewprocess of R2T4 calculations, student award packaging, and review of documentation for thosestudents selected for verification by the Department of Education, for Alameda, Berkeley, and MerrittCollege. Furthermore, we noted the Direct Loan, Pell Grant, Federal Work Study, and SupplementalEducation Opportunity Grant reconciliations were not reviewed by someone other than the preparer forBerkeley and Merritt College.Questioned Costs: None.Cause: The Colleges' were not able to provide evidence that certain internal controls were put intoplace to ensure compliance with the Student Financial Assistance Cluster regulations.Effect: A lack of internal controls can results in noncompliance with provisions of the various programswithin the Student Financial Assistance Cluster.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the Colleges' reinforce their control structure and controlenvironment to ensure there is an appropriate tone at the top of the organization, to monitor properfollow-up on audit findings and review all activity level controls to ensure compliance with the variousrequirements of the Student Financial Assistance Cluster.

2020 ? 008: Special Tests and Provisions: Enrollment ReportingFederal Agency: Department of EducationFederal Program Title: Student Federal Assistance ClusterCFDA Number: 84.063 and 84.268Award Period: July 1, 2019 to June 30, 2020Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: In accordance with 34 CFR680.309(b) and the National StudentLoan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education,schools must review, update, and verify student enrollment statuses, program information, and effectivedates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page ofthe NSLDS Professional Access (NSLDSFAP) website.Condition / Context: During our testing of 60 students, which is a statistically valid sample, we noted13 instances of late reporting of student status changes, 13 instances of improper student statusreporting at the campus-level and program-level records including 8 students that were not updated tograduated from withdrawn, and 2 instances where the effective date of a student status change wasimproperly reported at both the campus-level and program-level record.In addition, we noted that 37 out of the 60 students, which is a statistically valid sample, tested did nothave the correct program begin date per the institution's record reported to the NSLDS system.Questioned Costs: NoneCause: The Districts' internal controls did not ensure compliance with the criteria mentioned above.Effect: The case identified resulted in noncompliance with the applicable Title IV regulations.Inaccurate information is reflected on the NSLDS database. A student?s enrollment data protects therights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data,ensures loan repayment dates are accurately based on the last data of attendance, allows in-schooldeferments to be automatically granted using NSLDS enrollment data, and provides vast amounts ofcritical data about the effectiveness of Title IV aid programs, including completion data.Repeat Finding: This is not a repeat finding.Recommendation: We recommend the District review its reporting procedures to ensure thatenrollment and program information is accurately reported to NSLDS as required by regulations.

2020 ? 009: Outstanding Student Refund ChecksFederal Agency: Department of EducationFederal Program Title: Student Federal Assistance ClusterCFDA Number: 84.063 and 84.268Award Period: July 1, 2019 to June 30, 2020Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: In accordance with 34 CFR 668.164(l), an institution must return toED (notwithstanding any state law, such as a law that allows funds to escheat to the state) any Title IVfunds, except FWS program funds, that it attempts to disburse directly to a student or parent but theydo not receive or negotiate those funds. For FWS program funds, the institution is required to returnonly the federal portion of the payroll disbursements. If the institution attempted to disburse the fundsby check and the check is not cashed, the funds must be returned no later than 240 days after the dateit issued the check. If a check is returned, or an EFT is rejected, the institution may make additionalattempts to disburse the funds, provided that the attempts are made no later than 45 days after thefunds were returned or rejected. If the institution does not make an additional attempt to disburse thefunds, the funds must be returned before the end of the 45-day period and no later than 240 days fromthe date of the initial attempt to disburse the funds.Condition / Context: Management was unable to provide us with documentation for student refunds ofTitle IV federal financial aid that were outstanding as of June 30, 2020 for 18 out of the 40 refundstested, which is a statistically valid sample. In addition, 5 out of the 40 refunds, which is a statisticallyvalid sample, tested were not reissued within 45 days after the funds were returned or rejected.Questioned Costs: $38,826Cause: Management was not aware of the requirement to return and/or reissue checks as stated in thecriteria mentioned above.Effect: The District is not in compliance with Department of Education requirements that all studentrefund checks that are outstanding for more than 240 days be returned to the Department. Anyadditional attempts to disburse funds must be no later than 45 days after the funds were returned orrejected.Repeat Finding: This is not a repeat finding.Recommendation: We recommend that the District review its procedures related to outstandingstudent refund checks to ensure they are being returned to the Department of Education or disbursedto students as stated in the criteria mentioned above.

2020 ? 010: Activities Allowed or Unallowed, Allowable Cost/Cost Principles and Period ofPerformanceFederal Agency: Department of TreasuryFederal Program Title: Coronavirus Relief Fund-COVID-19 Response Block GrantCFDA Number: 21.019Award Period: July 1, 2019 to June 30, 2020Type of Finding: Material Weakness in Internal Control over Compliance and NoncomplianceCriteria or Specific Requirement: According to Federal Register, Volume 86, Number 10, theCoronavirus Relief Fund (the Fund) may only be used to cover costs that-1. Are necessary expenditures incurred due to the public health emergency with respect to theCoronavirus Disease 2019 (Covid-19)2. Were not accounted for in the budget most recently approved as of March 27,2020 (the date ofenactment of the CARES Act); and3. Were incurred during the period that begins on March 1, 2020, and ends on December 31, 2021Additionally, according to 2 CFR 200.303 nonfederal entities must establish and maintain effectiveinternal control over the Federal award that provides reasonable assurance that the non-Federal entityis managing the Federal award in compliance with Federal statutes, regulations, and the terms andconditions of the Federal award, this includes maintaining adequate source documentation to supportamounts and items reported.Condition / Context: Our audit procedures on the expenditures charged to the Fund resulted in thefollowing conditions:1. $378,498 were charged to the program as independent contractor/consultant fees. Although thedescription in the general ledger seems allowable, we were not provided with the supportingdocumentation to verify the expenditures met the criteria referenced above.2. $430,445 were charged to the Fund as miscellaneous operational expense for bus passes thatwere purchased for students attending the Spring 2020 semester and does not meet theallowability criteria referenced above. Furthermore, we were not provided with the supportingdocumentation to verify that these expenditures were incurred prior to March 1, 2020, the startof the period of performance of the Fund.Questioned Costs: $808,943Cause: The District?s internal controls did not ensure compliance with the requirements with the criteriamentioned above.Effect: The documentation available for review was not adequate to support the compliance with theactivities allowed/unallowed, allowable costs/cost principles, and period of performance requirementsapplicable to the program.

SPECIAL TESTS AND PROVISIONS - RETURN TO TITLE IV Program Name: Student Financial Assistance Cluster CFDA Numbers: 84.007, 84.033, 84.063, 84.268 Federal Agency: U.S. Department of Education Pass-Through Entity: Direct Funded Criteria or Specific Requirement 34 CFR Section 668.173(b): Return to Title IV funds are required to be deposited or transferred into the Student Financial Assistance (SFA) account or electronic funds transfer initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew, or the date on the cancelled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. Condition Significant Deficiency - The District's controls are not operating effectively to prevent non-compliance and ensure that Return to Title IV funds are returned within 45 days after the date the institution determines that the student withdrew. The District did not determine the withdrawal date for 12 out of 100 Return to Title IV calculations tested in a timely manner. All twelve of the exceptions noted were from Merritt College for which 40 Return to Title IV calculations were tested. All twelve of these instances occurred for the Fall 2018 term. Additionally, for 2 out of 100 Return to Title IV calculations tested, the required funds were not returned within 45 days of the student's withdrawal date. The funds were returned 236 and 287 days after the student's withdrawal date. Questioned Costs There are no questioned costs associated with this finding. The District did perform the calculations and returned the required funds. Context The District performed approximately 868 Return to Title IV calculations during the 2018-2019 year over all four campuses. Of these 868 calculations, 504 were performed for Laney College, 249 were performed for Merritt College, 62 were performed for Berkley City College, and 53 were performed for the College of Alameda. Effect The District is not in compliance with 34 CFR Section 668.173(b). Cause The District's internal controls associated with the Return to Title IV procedures failed to ensure that withdrawal calculations are performed in a timely manner to ensure that funds are returned within the 45 day requirement. Repeat Finding: Yes Recommendation The District should develop and implement procedures to ensure that the student withdrawal calculations are performed in a timely manner to ensure that Return to Title IV funds are returned no later than 45 days after the date the institution determined the student withdrew.

SPECIAL TESTS AND PROVISIONS - DIRECT LOAN RECONCILIATIONS Program Name: Student Financial Assistance Cluster CFDA Numbers: 84.007, 84.033, 84.063, 84.268 Federal Agency: U.S. Department of Education Pass-Through Entity: Direct Funded Criteria or Specific Requirement According to 34 CFR 685.300(b)(5), the school must promise to comply with applicable regulations and must agree to reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary, on a monthly basis as required by 34 CFR 685.300 (b)(5). Condition Significant Deficiency - During our review of the Direct Loans, it was noted that Laney College and Merritt College were unable to provide adequate documentation to show that they were reconciling the institutional Direct Loan records with the School Account Statement (SAS) data file received by COD on a monthly basis. Questioned Costs There were no questioned costs associated to the noncompliance. Context The District disbursed approximately $2,418,994 in direct loan funds during the 2019 fiscal year. Effect The District is out of compliance with 34 CFR 685.300(b)(5). Cause The District is not implementing policies and procedures to verify that the institutional Direct Loan records are being reconciled to the SAS data files on a monthly basis. Repeat Finding: No Recommendation It is recommended that the District develop and implement policies and procedures to ensure that the institutional Direct Loan records are being reconciled with the School Account Statement (SAS) data file received by COD on a monthly basis

COMMON ORIGINATION AND DISBURSEMENT (COD) REPORTING Program Name: Student Financial Assistance Cluster CFDA Numbers: 84.007, 84.033, 84.063 Federal Agency: U.S. Department of Education Pass-Through Entity: Direct Funded Criteria Common Origination and Disbursement (COD) System (OMB No. 1845-0039) ? All schools receiving Pell grants submit Pell payment data to the Department of Education through the COD System. Schools submit Pell origination records and disbursement records to the COD. Origination records can be sent well in advance of any disbursements, as early as the school chooses to submit them for any student the school reasonably believes will be eligible for a payment. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the school. Institutions must report student payment data within 15 calendar days after the school makes a payment, or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Schools may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Condition Significant Deficiency - The process dates reported in the COD files were more than 15 calendar days after the disbursement dates reported in the COD files in the District's financial records for the Fall and Spring semesters. Nine students of the 15 students tested at Merritt College had transactions processed in excess of 15 days. Reporting days ranged from 18 to 186 days after disbursement. Questioned Costs There were no questioned costs associated to the noncompliance. Context The District processed and reported approximately $24,526,937 in Pell grants during the year. Effect The District is not in compliance with the Federal requirements described in the OMB Compliance Supplement. Cause The District did not report student files to COD on a timely basis. Repeat Finding: Yes Recommendation The District should implement review procedures to verify that all information is properly reported and in compliance with Federal guidelines.

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