JOHNSON CITY, Tenn. (WJHL) — East Tennessee State University’s (ETSU) fiscal 2022 audit had two findings, including a repeat finding regarding collection procedures and another showing overpayment to some financial aid recipients.
Of five recently released state university audits, ETSU’s is the only one with findings. The Tennessee Comptroller’s office released the audit Wednesday.
The new finding related to financial aid for Title IV-eligible students (income-based) determined that 13 students received overpayments totaling $77,329.
The total of students overpaid was a tiny percentage of the 8,036 files “tested,” but because the “known questioned costs” exceed $25,000, the finding also will be reported in the State of Tennessee Single Audit.
The specific overpayments covered several different scenarios. Five students received funds despite not having “an acceptable academic status,” while four others were enrolled in ineligible programs after having completed the maximum eligible 60 hours in non-degree-seeking programs.
Another student was incorrectly identified as a sophomore rather than a freshman, while the other case involved a student dropping to less than half-time enrollment.
The overall result was $8,844 in Pell Grant overpayments and $68,485 in direct loan overpayments.
The auditor recommended additional training to financial aid and scholarship staff and student advisors so they’ll properly confirm eligibility. It also called for controls to monitor enrollment changes and other standard elements of the Title IV program.
ETSU didn’t dispute the finding and said it had implemented procedures to confirm eligibility, added training and added “additional levels of review … to procedures.” The university has also created a report that’s delivered electronically each week to flag students who haven’t declared a major but have at least 60 credit hours.
The first finding, a repeat from the FY 2021 audit, was that “university staff did not conduct proper collection procedures on accounts payable.”
The bursar acknowledged those errors “were for the same reasons as noted in the prior audit” and that “staff simply did not conduct collection processes in adherence to policy.”
The audit tested 32 delinquent student accounts receivable, including five from the College of Nursing, which has its own policy. Of the 27 regular receivables, nine had billing letters sent anywhere from one day to 19 months late, with an average letter being sent 87 days late.
Nearly half the student receivables were referred late to the collection agency, with the average being eight months after the final billing was issued.
The effect of the errors, the audit states, is the possibility of ETSU “being unable to collect funds it is owed in a timely manner or at all.” It noted that the longer accounts are past due, the less chance they’ll be collected.
The recommendation, in this case, was simply that ETSU ensure policies are followed. ETSU responded by concurring and noting that several steps were taken after the FY 2021 finding but the results of those didn’t go into effect in time to eliminate the problem in the next audit cycle.
The changes at ETSU include the hiring of additional staff, semi-automated notification processes and a new collections calendar. ETSU is also working with its collections vendor to increase automation.
