Coastal Bend College

Finding 2025-001 – Required Services to Eligible Participants Type of Finding: Significant Deficiency and Compliance Federal Grant Name and ALN: TRIO Cluster: TRIO Educational Talent Search (84.044A) Federal Agency: U.S. Department of Education (Grant ID P-044A210563-23) Compliance Requirement: N. Special Tests and Provisions Repeat Finding: No Criteria: Federal regulations stipulate that Talent Search projects must deliver certain core services to eligible participants, including academic tutoring, course selection advising, college entrance exam prep, financial aid assistance, and guidance for GED or reentry programs. This requirement is codified in 34 CFR § 643.4. Additionally, applicable provisions in the OMB Compliance Supplement (2 CFR 200, Appendix XI, Part 4 – Department of Education: Special Tests and Provisions) require auditors to verify that all required services are provided to participants. Condition: During our test of controls and compliance with Special Tests and Provisions Services that Student Support Services, Talent Search, Upward Bound or McNair Projects Must Provide, we identified one participant who did not receive a required service—specifically, no academic tutoring or college entrance exam preparation was provided during the program year. Cause: Lack of internal controls over compliance—specifically, monitoring—did not allow the College to ensure all eligible participants received the required services • Case management or service delivery records were not consistently reviewed. • There was no verification step or supervisory review confirming service delivery before participant files were closed. Effect: By not delivering at least one mandated service to the participant: • The program falls into noncompliance with 34 CFR § 643.4, risking funding eligibility. • Potentially eligible students may not receive crucial educational support, which doesn’t align with the Talent Search’s objectives to improve college readiness and access. Questioned Cost: None. Context This issue was identified during a special test focusing on required services We tested a sample of 40 from a population of 1,369 students. Only one exception was found, suggesting this may not be systemic; however, even a single instance represents noncompliance with federal regulation. Recommendation: We recommend that Talent Search management: 1. Enhance monitoring controls and documentation—implement a checklist or sign-off process ensuring each required service is either recorded or formally declined in writing before participant case closure. 2. Conduct supervisory or quality assurance reviews—periodically (e.g., monthly), review a sample of participant files to confirm all mandated services have been delivered and properly documented, with corrective action taken when omissions are identified. Views of Responsible Officials: The College agrees with the recommendation and has provided a corrective action.

Finding 2025-002 – Time and Effort Documentation Type of Finding: Significant Deficiency and Compliance Federal Grant Name and ALN: TRIO Cluster: TRIO Educational Talent Search (84.044A) and TRIP Upward Bound (84.047A) Federal Agency: U.S. Department of Education (Grant ID P-044A210563-23 and P047A221356-24) Compliance Requirement: B. Allowable Costs/Costs Principles Repeat Finding: No Criteria: 2 CFR 200.430 (g)(vi) requires that charges to Federal Awards for salaries and wages be based on records that accurately reflect the work performed and that the records support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The College complies with 2 CFR 430 (g)(vi) by requiring employees to complete time and effort form reflecting the employees’ duties within the grant. The forms are signed by the employees as well as a supervisor having firsthand knowledge of the employees’ duties. Two (2) forms from our sample of 40 were not signed when requested. Cause: Due to an administrative oversight, these forms were overlooked. Effect: Without completed time and effort forms, the College could risk unallowable employees to the TRIO Cluster. Questioned Cost: None. Context During our tests of federal payroll, we selected a sample of 40 from a population of 853. Two (2) employees from our sample did not have signed time and effort records until requested by the auditors. Recommendation: The College should review all charges, both planned and actual, against grant documents and time and effort forms to ensure that the planned expenditures conform to the grant application and that the actual charges are for employees working in the federal program. Views of Responsible Officials: The College agrees with the finding and recommendation and has prepared a corrective action plan.

2024-008 – Non-Compliance and Significant Deficiency in Internal Control over Compliance - CARES Institutional (HEERF) Federal Awards

Assistance Listing Number: 84.425F

Program Name: COVID-19 Education Stabilization Fund: HEERF – Institutional Portion

Pass Through Identifying Number: N/A

Award Year: 2023-2024

Federal Agency: U.S. Department of Education

Criteria: In accordance with 2 CFR § 200.305(b) of the Uniform Guidance, which applies to the HEERF grants, grantees must seek to minimize the time between drawing down funds from the G5 system and applying those funds to support a grant award’s activities. Consistent with this requirement, grantees must maintain grant funds in interest-bearing accounts, and any interest earned on grant funds above $500 per year must be remitted to the Federal government. In accordance with 2 CFR.303(a) of the Uniform Guidance, which applies to the HEERF grants, non-Federal entities are required to establish and maintain effective internal controls over federal awards.

Condition: No internal controls were identified in regards to appropriate cash management for the Higher Education Emergency Relief Fund Institutional Aid.

Cause: Only one person prepared, reviewed, and submitted the cash drawdown requests. In addition, the College did not appropriately monitor the cash deposits for interest earned.

Effect: The college earned interest on the funds drawn from the G5 system that were in excess of $500 and did not comply with requirement to return funds. As a result, the college may be required to return the excess funds.

Questioned costs: $31,057.

Recommendation: It is recommended that the client establish controls in order to ensure that federal awards are prepared and reviewed by multiple personnel before processing. CRI will recommend controls be in place to ensure that there is a minimum period between grant drawdowns and grant expenditures.

Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 108.

2024-009 – Internal controls over compliance - CARES Institutional (HEERF) Federal Awards

Type of Finding: Significant Deficiency

Assistance Listing Number: 84.425F

Program Name: COVID-19 Education Stabilization Fund: HEERF – Institutional Portion

Pass Through Identifying Number: N/A

Award Year: 2023-2024

Federal Agency: U.S. Department of Education

Criteria: In accordance with 2 CFR.303(a) of the Uniform Guidance, which applies to the HEERF grants, non-Federal entities are required to establish and maintain effective internal controls over federal awards. Specifically, internal controls should be established to ensure the non-federal entity appropriately documents review for suspension and debarment before entering into covered transactions. In addition, 2 CFR 180 Subpart C prohibits participants in Federal awards from entering into covered transactions with suspended or debarred parties.

Condition: The College did not frequently review the vendors and did not maintain documentation that the vendors were checked against the sam.gov website for suspension or debarment.

Cause: The College did not frequently review the vendors and did not maintain documentation that the vendors were checked against the sam.gov website for suspension or debarment due to oversight by personnel.

Effect: The college could potentially enter into transactions with parties that are suspended or debarred.

Questioned costs: N/A.

Recommendation: It is recommended that the client establish controls in order to ensure that vendors are reviewed and documentation is maintained through sam.gov or similar to verify that they are not suspended or debarred.

Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 108.

Assistance Listing Number: 84.425F Program Name: COVID-19: HEERF – Institutional Portion Pass Through Identifying Number: N/A Award Year: 2022-2023 Federal Agency: U.S. Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a). Management should ensure that internal controls related to federal and state awards are appropriately designed and operating effectively in order to comply with 2 CFR 200.305. Condition: The College did not ensure that internal controls were appropriately designed and operating in regards to HEERF drawdowns which resulted in the incorrect classification of two different awards within G-5, an overdraw of funds in the amount of $1.9M and the incorrect recording of associated grant revenues. Cause: Turnover at the College had led to unqualified personnel at the management level. Effect: Journal entries for drawdown of HEERF funds were not approved within Colleague, drawdown requests were not reviewed and approved prior to submitting within G5 reporting system. Additionally, bank reconciliations were not reviewed by the CFO/VP of Finance and Business Operations in order to reconcile payments received from the DOE to grant accounts. It was determined that controls in place were not operating effectively during the fiscal year. Questioned costs: N/A Recommendation: Management must review the roles and responsibilities of accounting personnel and ensure they have the necessary background and training to properly execute required accounting functions and adhere to necessary internal control functions. Management should review the controls in place and assess that such controls are designed appropriately given the positions in roles within the accounting department. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the findings and, as discussed, the College is currently searching for a candidate to fulfill the CFO position with the appropriate level of training. The College does intend to interview accounting professionals from the community to determine if appropriate levels are present. Responsible Party: Dr. Justin Hoggard, Board President and Dixie Lytle, Director of Human Resources Expected Completion: December 31, 2024 Anticipated Completion: December 31, 2024