State auditors found a discrepancy of more than $2 million in the amount of money paid to community college retirement plans by the Maryland Higher Education Commission, but the problem has been corrected, an MHEC official said at a meeting of the Joint Audit and Evaluations.
Members of the state’s Office of Legislative Audits went over an audit of the department based on activity between Nov. 5, 2015, and March 31, 2020. The discrepancy in the retirement system account is one of the concerns listed in the report with five being issues reported during the last audit.
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The auditors said in the report that the 2019 audit data “indicated that the colleges received $14,242,547 from MHEC for employees in an optional retirement plan, but MHEC’s records indicated payments of $16,357,940, a difference of $2,115,393.”
Dr. James D. Fielder Jr., Maryland’s Secretary of Higher Education, said the issue has been resolved.
“The FY 2019 differences noted by OLA were due to timing and reporting errors by the community colleges,” Fielder said in his testimony. “MHEC provided copies of the FY19 reconciliations to OLA.”
Auditors also found that MHEC “did not ensure that community colleges returned unspent English for Speakers of Other Languages grant funds as required.”
“Our review of program data reported by 11 colleges disclosed four colleges that appear to have been paid $403,968 in excess of program costs, but only one of the four remitted its excess balance of $4,992,” auditors said in their report.
“MHEC has received all the required audited data from the community colleges, has performed a documented review of the FY 2021 information, resolved any issues with differences noted with information reported and MHEC records, and contacted the colleges showing excess payments to recover excess funds, Fielder said in his testimony. “MHEC will continue to pursue collection of the excess funds identified in its most recent review.”
Other concerns included in the audit:
• MHEC did not make sure that students that received career-based financial aid had fulfilled their service obligations. The Commission delayed sending required annual notices and follow-up notices to 12 of 17 students who did not respond were sent 14 to 442 days late.
• A second concern also addressed career-based financial aid. MHEC “did not have a process for the independent review and approval of adjustments made to accounts receivable due from aid recipients who had not met their service obligations, and MHEC did not ensure that all repayments due were posted to its accounts receivable system,” auditors said in their report.
• MHEC lacks “sufficient controls over user access to the automated system used to record and store personal, academic, and financial information of students applying for financial aid. User agreements were not found for eight out of 25 external and internal user accounts. Six hundred and fifty users that had access to the account in September 2020 had not logged in for six months.”
• Two other concerns addressed IT issues. MHEC did not “adequately safeguard certain personally identifiable information and did not use a web application firewall to secure its financial aid system,” the auditors said in their report.
MHEC agreed with each of the OLA findings and has “have developed an implementation plan including projected completion dates,” Fielder said in his testimony.
“The plan includes meeting with the Department of Budget and Management Audit and Compliance Unit monthly to help facilitate the recommended changes, which we began before the audit was completed,” Fielder said.