Massachusetts College of Art and Design-Student Financial Assistance Programs
May 24, 2012 · Massachusetts College of Art and Design · Read the full official report (PDF) ↗ · official site ↗
Published May 24, 2012 Audit covers July 1, 2010 – June 30, 2011 Under Suzanne M. Bump · 2011–2023
source
“However, MassArt had not, (a) implemented policies and procedures to send disbursement notification letters to students receiving Direct Loans, (b) improved federal work study internal control and payroll procedures, (c) implemented policies and procedures for the calculation and timely return of Title IV funds, and (d) sufficiently updated its internal control plan to comply with the OSC’s internal control guidelines.”
Read the plain-English breakdown
This is a follow-up audit of Massachusetts College of Art and Design’s federal student financial aid programs for July 1, 2010 through June 30, 2011.
“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. 2011-0181-16S) and in the Single Audit of the Comonwealth of MassArt’s Federal Student Financial Assistance (SFA) programs funded through the United States Department of Education (ED) for the period July 1, 2010 through June 30, 2011.”
Auditors checked whether MassArt had fixed problems found in an earlier audit.
“The purpose of our audit was to determine if MassArt had taken corrective action and made improvements on the audit results identified in the prior audit report (2011-0181-16S).”
Federal student-aid rules affect loan notices, work-study payments, and money that must be returned when students withdraw.
“To ensure compliance with federal regulations, MassArt should develop written policies and procedures documenting the process for notifying students and parents regarding the disbursement and limited timeframe for accepting or rejecting FDLs.”
If you are a student or parent, the audit is about whether MassArt properly told borrowers about loan disbursements and cancellation rights, kept work-study payroll records in order, and returned unearned federal aid on time.
“A letter must be sent containing the disbursement date, amount, and proper timeframe for canceling all or part of the loan.”
The school made progress, but auditors still found unresolved weaknesses in several financial-aid controls.
“Our follow-up audit disclosed that MassArt has not taken sufficient corrective action to address prior audit issues regarding: (a) the issuance of Disbursement Notification Letters to students receiving Federal Direct Loans (FDL) in compliance with federal requirements, (b) the Federal Work Study (FWS) internal control and payroll procedures, (c) the return of Title IV funds, and (d) improvements and enhancements to its Internal Control Plan (ICP).”
MassArt said it would keep improving its processes, including loan notices, work-study oversight, withdrawal procedures, refund calculations, and its internal control plan.
“MassArt will continue to review and modify its Internal Control Plan.”
The most concrete financial issue was that auditors found federal aid that MassArt had not returned or had underpaid to the U.S. Department of Education.
“Of this amount, MassArt should have returned $19,148 of Title IV funds to ED.”
“Title IV funds” means federal student aid money; when a student withdraws, the school may have to calculate how much was not earned and send it back to the U.S. Department of Education.
“The ED has established regulations that govern the return of Title IV funds.”
8 figure(s) pending source verification - not shown
What the Auditor checked
- Partially Determine whether MassArt had taken corrective action and made improvements on the audit results identified in the prior audit report.
What the Auditor found
Why it matters: Students and parents may not have received required information about loan disbursement dates, amounts, and cancellation rights.
Standard: 34 Code of Federal Regulations Section 668.165(a); ED Federal Student Aid, The Blue Book, Chapter 14
1 recommendation
- Develop written policies and procedures documenting the process for notifying students and parents regarding the disbursement and limited timeframe for accepting or rejecting FDLs.agency: agreed
Agency response & Auditor reply
Agency: "In the Fall 2011 semester as part of the Financial Aid processing cycle on the crediting of funds to student accounts and the refunding of the excess beyond the College charges; each student who had federal loans was sent an electronic message informing him/her of the loan disbursement and a reminder of the student rights to cancel all or part of the federal loan disbursement."
Why it matters: Payroll costs may be unsupported, duplicate, late, or paid for time that conflicts with class schedules.
Standard: 34 CFR 675.19(b)(2); 34 CFR 668.16(c)(1) and (2) ( 34 CFR 675.19(b)(2); 34 CFR 668.16(c)(1) and (2) )
1 recommendation
- Update internal controls and payroll policies and procedures, extend controls to departments participating in FWS, advise staff of payroll and student-employee responsibilities, and ensure supervisors monitor work time conflicts with class schedules.
Agency response & Auditor reply
Agency: "The College will work with the area supervisors to assist with better management and oversight of the program along with processing items in a timelier manner."
Why it matters: Federal student aid funds were not returned accurately or within required deadlines, resulting in amounts owed to ED.
Standard: 34 CFR 668.22; 34 CFR 668.173(b); Student Financial Aid Handbook, Chapter 2 ( 34 CFR 668.22; 34 CFR 668.173(b) )
1 recommendation
- Update SFA policies and procedures, institute a process to identify unofficial withdrawals, develop procedures to return Title IV refunds within 45 days, and resolve the DATATEL calculation issue.
Agency response & Auditor reply
Agency: "The College is looking at processing additional academic information and attendance data into our ERP system that will assist with the review and management of student unofficial withdrawal activity."
Why it matters: MassArt may not fully meet OSC internal control expectations for managing risk and sustaining operations.
Standard: Office of the State Comptroller's Internal Control Guide ( OSC’s Internal Control Guide, Chapter I, Internal Control Plan Framework, Policies and Procedures )
Agency response & Auditor reply
Agency: "MassArt will continue to review and modify its Internal Control Plan."
Verified dollar findings
Identified dollar findings that do not fall in a named band.
Prior findings revisited
"Our follow-up audit disclosed that MassArt has taken corrective action to address two prior audit issues regarding (a) exit counseling sessions, and (b) reporting of student status changes."
"Our follow-up audit disclosed that MassArt has not taken sufficient corrective action to address prior audit issues regarding: (a) the issuance of Disbursement Notification Letters to students receiving Federal Direct Loans (FDL) in compliance with federal requirements, (b) the Federal Work Study (FWS) internal control and payroll procedures, (c) the return of Title IV funds, and (d) improvements and enhancements to its Internal Control Plan (ICP)."
More audits of this entity
Other Office of the State Auditor reports on Massachusetts College of Art and Design , including the prior audits referenced above.
-
Massachusetts College of Art and DesignCollege / University · March 18, 2011 - Massachusetts College of Art and DesignCollege / University · December 15, 2016
- Audit of the Massachusetts College of Art and DesignCollege / University · April 19, 2022