Massachusetts Bay Community College

This is a follow-up audit of Massachusetts Bay Community College, focused mainly on prior audit issues and federal student financial aid compliance for July 1, 2009 through June 30, 2010.

“In accordance with Chapter 11, Section 12, of the General Laws, the Office of the State Auditor has conducted a follow-up audit of the issues contained in our prior audit report (No. 2010-0196-16S) and in the Single Audit of the Commonwealth of Massachusetts, and of MassBay’s Federal Student Financial Assistance programs funded through the United States Department of Education (ED) for the period July 1, 2009 through June 30, 2010.”

The auditors checked whether MassBay had fixed problems found in an earlier audit, especially around internal controls, student loan notices, student enrollment status reporting, and old uncashed checks.

“Our follow-up audit of MassBay’s procedures for corrective action and improvements in the areas identified in our prior audit report were to determine whether:”

Student loan records need to be reported correctly because graduation, withdrawal, or dropping below half-time can affect loan status and federal aid tracking.

“SFA regulations governing Title IV student assistance programs require institutions, lenders, guaranty agencies, and the Direct Loan Servicer to monitor and update the enrollment status of all students who receive federal student loans.”

If you are a student or taxpayer, this matters because some old outstanding checks included student refunds and financial aid money that should have been resolved properly.

“A portion of these checks represented student refunds for federal or state financial assistance and non-financial assistance.”

MassBay made progress on two issues, but the auditors said two important problems were still unresolved.

“Our follow-up audit disclosed that MassBay has not taken sufficient corrective action to address prior audit issues regarding (a) accurately reporting student status changes on a timely basis and (b) the determination of the status of outstanding checks, as discussed below.”

The report says MassBay should fully carry out its new procedures for reporting enrollment changes and strengthen controls over the process.

“MassBay should fully implement its new policies and procedures to ensure timely and accurate reporting of enrollment data to NSLDS in accordance with the requirements of 34 CFR 682.610(c) (2).”

The serious issue is accountability: MassBay had duties to students and federal aid programs, and the audit found weaknesses in how it handled loan status reporting and old checks.

“An institution must exercise the level of care and diligence required of a fiduciary with regard to maintaining and investing title IV, HEA program funds.”

In plain English: NSLDS is the federal student loan database; NSC is the outside clearinghouse MassBay used to send student status updates; Title IV means federal student aid programs; ICP means MassBay’s internal control plan.

“Because MassBay depends on the NSC to report these changes to NSLDS, it does not verify with NSLDS that the correct enrollment status has been reported.”