1. The Minnesota State Colleges and Universities System is an Equal Opportunity employer and educator. Audit Committee March 19, 2008 Meeting Review 2007 Federal Financial Assistance Audit Report Beth Buse, Deputy Director of Internal Auditing Christopher Halling, System Director for Financial Aid Steve Wischmann, Partner with Kern, DeWenter, Viere

2. Slide 2 Background Annual audit required by federal law Focus on major programs –Student Financial Aid Testing performed by Principal Auditor –With assistance from Internal Auditing Results included with State of Minnesota Report –To be submitted to federal government by 3/31/08

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4. Slide 4 Note: Excludes Federal Work Study and Perkins Loans

5. Slide 5 Federal Student Financial Aid - Summary of Questioned Costs Fiscal Year 2003 - 2007 Fiscal Year Questioned Cost Type Grand Total Loan Maximums Return to Title IV (R2T4) Satisfactory Academic ProgressOther 2003 $ 7,055 $ 794,803 $ 4,852,888 $ 5,654,746 2004 $ 12,551 $ 33,581 $ 629,633 $ 675,765 2005 $ 10,466 $ 117,289 $ 13,294 $ 141,049 2006 $ 3,540 $ 945,859 $ 530,245 $ 1,479,644 2007 $ 10,323 Grand Total $ 33,612 $ 1,901,855 $ 6,012,766 $ 13,294 $ 7,961,527

6. Slide 6 FY 2007 Single Audit Findings Return of Title IV Funds –St. Paul College (questioned costs - $10,323) Timely return of loan funds (3 institutions) Timely reporting –NSLDS (multiple institutions) –Pell (2 institutions) Notification of loan disbursement information (multiple institutions)

7. Slide 7 FY 2007 Single Audit Findings continued Administrative requirements - reconciliations (3 colleges) Verification policies incomplete (3 colleges) Satisfactory academic progress policy did not reflect practice (1 college)

8. Slide 8 USDOE Program Review Status Final Determination Letters Received: –St. Cloud State University: Return to Title IV –Metropolitan State University: Return to Title IV Awaiting Final Determination –Minneapolis Community and Technical College: Satisfactory Academic Progress Information sent to USDOE November 2006

9. Slide 9 FY 2007 Single Audit – Prior Audit Finding Excessive Security Access to Financial Aid System –Reported in 2005 –Implementation planned for April 2008