The college does not have procedures in place to require students to sign a promissory note that would certify that the student is responsible for any balances owed to the college when financial aid is not sufficient to cover the total amount due to the college. The accounting system does not provide an audit trail to enable the tracing of all payments from the subsidiary ledger to the general ledger. Tuition payments received from Pell Grant and direct loan awards that were posted to the subsidiary ledger could not be traced to the general ledger. There was no evidence that collection efforts were made on accounts receivable. The college could not provide documentation supporting its assertion that monthly billings had been mailed to students since March 1997.
Management is responsible for safeguarding assets and reporting accurate financial data.
Any failure to provide such a system can result in inaccurate financial reporting and loss of income to the college. Elaine P. Nunez Community College should establish procedures to record the receivable and revenue transactions in the accounting records at the time they occur. Such procedures should include periodic reconciliation of the general ledger accounts to the subsidiary records. In addition, management should establish an adequate audit trail from the posting of payments in the subsidiary accounts to the general ledger. Also, a review should be made of each individual receivable account to determine its collectability.