KENTUCKY STATE UNIVERSITY Prior Year Schedule of Findings and Questioned Costs, continued
Year ended June 30, 2014
Finding 2013-002, continued:
Effect:
The University posted an adjusting journal entry to reconcile student and grant accounts receivable to the general ledger account balances and to increase the allowance for doubtful accounts subsequent to year end. Increased management effort in this area can result in a reduction in the number and amount of delinquent and potentially worthless receivables. The positive results from this process may include significantly improved cash flow and profitability and should minimize the need for a year-end adjustment of this account.
Recommendation:
We recommend the University complete reconciliations of the student, grant, and other accounts receivable subsidiary ledgers to the general ledger account balances at least on a quarterly basis and assess the collectability of all receivables, especially student receivables on a quarterly basis.
The following formal collection procedures should be established:
The continuous review of accounts receivable for old and slow-paying accounts.
A formal periodic review of the account receivable aged trial balance.
The implementation of formalized procedures for contacting delinquent accounts for payment, such as sending letters to slow-paying customers.
The increased use of collection agencies and the department of revenue to aid in collecting delinquent accounts.
Current year status:
See finding 2014-001.
Section III - Federal Award Findings and Questioned Costs (under Section .505(d)(3) of OMB Circular A-133):
Finding 2013-003:
Federal Program: U.S. Department of Education Federal Pell Grant Program, CFDA 84.063 Federal Direct Student Loans Program, CFDA 84.268
Condition:
During the audit, we noted one student who withdrew from all classes at the beginning of the semester but the financial aid office was not notified and funds were not returned in a timely manner. Also during our testing of Return of Title IV Funds, we noted the University did not return unearned Title IV Funds within 45 days for three out of the forty students tested.
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