Minnesota Office of the Legislative Auditor
Financial Audit Division

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Report Summary
Community College System

Student Federal Financial Aid Programs

Management Letter, Fiscal Year 1993;

 

Public Release Date: June 24, 1994 No. 94-29

Objectives

Test compliance with certain finance-related legal provisions relating to selected federal student financial aid programs administered by the Community College System. We included the following federal programs: PELL grants, Stafford Loans, and Perkins Loans.

Review significant internal control structure policies and procedures concerning federal student financial aid including: federal financial aid revenues and cash management and federal financial aid packaging and disbursements on selected community college campuses, as well as the federal Perkins loan management and repayment process at the system office.

Conclusions

We found 29 areas where the Community College System or the individual colleges had not complied with federal regulations and 16 areas where internal controls need to be improved:

We found that Rochester Community College did not resolve conflicting information in four student files, certified seven Stafford loans using incorrect information, did not comply with Federal Perkins Loan Program cash management requirements, and did not adequately account for federal awards and drawdowns. In addition, the college's Stafford and Perkins loan counseling procedures do not meet federal guidelines. The college also does not verify the completeness of Perkins loans recorded on the loan management system, has inadequate controls over incoming Federal Family Educational Loan checks, and is not appropriately managing funds within its federal account.

We found that North Hennepin Community College has not complied with three Federal Perkins loan requirements, did not resolve conflicting information in seven student files, improperly calculated expected family contributions for three students, and improperly waived one federal financial aid repayment. The college also does not manage its federal cash adequately, and has inadequate controls over incoming Federal Family Educational Loan checks. Finally, the college did not receive federal reimbursement for $14,865 in Pell Grants.

We found that the Willmar Community College satisfactory academic progress policy does not meet federal guidelines. We also found that the college has not defined exceptional need for awarding Federal Perkins loans, needs to improve controls over federal financial aid, and has inadequate control over its federal cash.

We found that the Fergus Falls Community College satisfactory academic progress policy does not meet federal guidelines, and that the college has not resolved a Federal Perkins loan discrepancy with the U.S. Department of Education. In addition, the college has inadequate controls over incoming Federal Family Educational Loan checks.

We found that Northland Community College does not comply with Federal Perkins Loan Program cash management requirements, and has inadequate controls over federal financial aid reporting. In addition, the college has inadequate controls over incoming Federal Family Educational Loan checks, and does not have an adequate process in place to comply with federal financial aid transcript requirements.

We found that Inver Hills Community College does not monitor academic progress during summer sessions, did not resolve conflicting information in four student files, and does not have an adequate process in place to comply with federal financial aid transcript requirements.

We found that Minneapolis Community College improperly certified a Stafford loan, maintains excessive cash balances in its Federal Perkins loan account, took an unallowable administrative cost allowance from the Perkins loan account in fiscal year 1993, and has inadequate controls over federal student financial aid packaging. In addition, the college's satisfactory academic progress policy does not meet federal guidelines in two areas.

We found that Vermilion Community College paid financial aid to an ineligible student and improperly certified a Supplemental Loan for Students (SLS) loan. Anoka Ramsey Community College paid financial aid to an ineligible student and does not have an adequate process in place to comply with federal financial aid transcript requirements. Normandale Community College did not resolve conflicting information in four student files.

 

Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155