Henderson State University’s financial aid office is almost sufficiently trained and equipped to properly handle student financial aid and process audits more quickly, Arkansas lawmakers said Thursday.
Arkansas Legislative Audit released 15 findings of apparent regulatory violations to the university’s financial aid office in a report to the Joint Legislative and Educational Audit Subcommittee. After a little discussion on the university’s progress, the subcommittee approved the filing of the audit on Thursday.
Auditors found that the university had failed, among other things, to reconcile accounts, and that it had often misdirected or used federal financial aid.
These findings cover two fiscal years, from July 1, 2017 to June 30, 2019. During that same period, delays in verifying financial aid frustrated students, parents, educators and community members who urged the students to attend university.
In August 2019, just weeks before the start of the fall semester, more than 1,000 students in Henderson State – out of just under 4,000 students in total – were awaiting a financial aid audit, a Arkansas State University chairman of the system, Chuck Welch, told lawmakers. The system hopes to merge Henderson State into it by Jan. 1, pending approval from the institutions’ shared accreditation agency, the Higher Learning Commission.
There were only 14 pending audits at the same time at Arkansas State University, which had more than 13,000 students last year.
“Most of these issues were poor training of staff, people not really qualified to do the job,” Welch said.
The software presented challenges to the financial aid office as well, Welch said, but the problems were mainly due to “incompetence, if we’re going to be very frank about it.”
He and interim Henderson State president Jim Borsig were relieved to find that the audit did not contain any findings of fraud.
“We really didn’t know,” Welch said.
Since the audit period, only one employee of the financial aid office remains with the office, Welch said. This employee, Welch said, had only worked in the office for about two months before, and others began an office overhaul.
A few days after the partnership with Henderson State in July 2019, the ASU system recommended moving the financial aid office from the jurisdiction of the finance and administration department to student affairs, which is a more typical university configuration, Welch said.
During the years of the audit, Brett Powell was in charge of the finance and administration department for most of the month and a half. Powell, also a former director of the Arkansas Division of Higher Education, resigned in May 2019 to take a position in the finance department at Baylor University after tensions between Powell and the president of the University of L ‘time, Glen Jones Jr.
The university is still considering training financial aid personnel and is preparing to switch to another software, Banner, to manage financial aid.
The auditors looked at 50 recipients of student aid, 25 for each year, and 10 calculations of money to be remitted to the federal government.
The resulting audit found that the university did not have several written policies required for processing financial aid and failed to reconcile accounts, including discrepancies between funds received and funds received. actual disbursements for the Pell grant program and the direct loan program.
The auditors noted many incorrect calculations that resulted in excess aid or less money returned to the federal government than it should have been. Further incorrect calculations reduced the amount of Pell Grant money some students were actually eligible for.
Additionally, the university has inappropriately used financial aid money by using excess loan funds to pay off student debts from previous semesters. Financial aid can only be used for the academic term in which it is awarded.
In its final conclusion, under the “other” umbrella of the audit, the auditors wrote that staff reported to them about loans, grants, scholarships and repayments that were processed late or not at all. Employees even had scholarship checks in their desks.