2014 Corrective Action Matrix for 2014 audit findings January 13, 2015

FINDING: Entity-Wide full accrual basis, the District’s unrestricted Net Position/deficit is $27.2 million. Due primarily to the growing obligation for the postemployment health care benefits and the obligation to repay OPEB taxable bonds. CORRECTIVE ACTION: The District currently has an active investment portfolio funded through the issuance of bonds and has earmarked funds held in the County Treasury for the funding of the OPEB obligation. We are in the process of obtaining a new actuarial study to determine the amount required for retiree’s medical benefits, once determined an irrevocable trust will be created and the OPEB contribution will be adjusted to address future needs.

FINDING: The disbursement to or on behalf of students processed at the College, it was observed that the process dates reported in the COD files were more than 30 days after the disbursement dates reported in the COD files in the District’s financial records. CORRECTIVE ACTION: Establishment of a district-wide Compliance Assurance Program (CAP) for its Financial Aid Program. Compliance will continue to be monitored by the District Financial Aid Director and the Internal Auditor. District IT is currently conducting a preliminary development of a pilot application to automate the COD reporting process.

FINDING: One student tested at Merritt College was awarded their Pell disbursement, but dropped before the second disbursement was paid. The College had not identified this student as a Return of Title IV student and no calculation was prepared to determine the amount of funds that needed to be returned (if any). CORRECTIVE ACTION: Continued training and compliance monitoring by the Financial Aid Director and the CAP.

FINDING: The Colleges noted above did not have adequate documentation to show that they were reconciling the SAS data file and the Loan Detail records to the institution’s financial records on a monthly basis. CORRECTIVE ACTION: Continued training and compliance monitoring by the Financial Aid Director and the CAP.

FINDING: The District IT Department did not submit any required enrollment reports (SSCR) to the NSLDS from the period between early September 2013 to min-June CORRECTIVE ACTION: Data covering the period from September 2013 to mid-June 2013 has been submitted to NSLDS. District IT and A&R are working together to correct the data submission.

FINDING: The District is not following established written policies and procedures for monitoring Federal equipment. Equipment that is directly shipped to the sites rather than the District’s warehouse are potentially bypassing the established procedures for tagging them as Federal equipment and are not being included on the site’s inventory listing of the Federal program. One item tested was delivered directly to the Berkeley campus and was not properly tagged and identified as Federal. CORRECTIVE ACTION: AP 6551 Inventory of Property and Equipment established to account for items shipped directly to the Colleges. First review at Cabinet on Jan, 13, 2015.

FINDING : Time studies have not been completed for individuals who work either full-time or part-time on the program as required by the OMB Circular. The College did obtain a signed certifications after this issue was brought to their attention. CORRECTIVE ACTION: Internal auditor and District Grants Administrator training staff. CAP for Grants Management to promote compliance with regulatory requirements.

FINDING: CARE advisory committee meeting was held only one time during the year. The CARE Program guidelines note that the advisory committees are to meet at least twice during each academic year. CORRECTIVE ACTION: Two advisory meetings have been set up for the fiscal year. These are joint meetings with EOPS and EOPS guidelines only require one advisory meeting annually.

FINDING: Proof of residency needs to be obtained and maintained, when changing a student from non-resident to resident status. CORRECTIVE ACTION: District A&R created a query to identify students where their status has been changed from non-resident to resident. Each College will be provided with a list of student whose residency classification changed within the semester, and they will be required to submit supporting documentation to District A&R for appropriate record keeping.

FINDING: Education Protection Account (EPA)funds were spent on administrative salaries. CORRECTIVE ACTION: Funds in question were for faculty department chair positions. In the future, funds received through the EPA will not include the department chair costs.

Measure A General Obligation Bonds Audit January 13, 2015

FINDING: Payroll funds were spent on non-bond activity CORRECTIVE ACTION: Unauthorized expenditures moved from the Bond fund into the General Fund in for expenses of , restoring the amounts in the Bond fund. All employees being charged to the Bond fund have been reviewed to ensure their job description still requires them to be paid using Bond funds.

FINDING : The Citizens’ Oversight Committee has not met since September 26, 2013 CORRECTIVE ACTION: The members of the Citizens’ Oversight Committee have been established and contacted and a meeting is scheduled for late January 2015.