YOUNGSTOWN, Ohio (WKBN) — Eastern Gateway Community College has suspended its Free College Benefit Program after violating the rules of the program. Recently, they have been given a new sanction by the Department of Education.
On Monday, EGCC learned the DOE is placing them on Heightened Cash Monitoring 2, following an investigation into the financing model of the Free College Benefit Programs.
The investigation found “systemic issues” including discrepancies in accounting records and inadequate internal controls.
“What HCM 2 says is that you have to first go in and credit the Pell Grants to the students and any stipends that they might be owed, and then you request reimbursement, you submit a roster of the students,” said President Michael Geoghegan.
Before this, the college could request Pell Grants and then credit them to students.
“We have to then submit this roster to the payment processing division within the department. They review it, everything’s in order, then they send us the money,” said Geoghegan.
A spokesperson from the DOE sent us a statement that said, in part, putting the college on Heightened Cash Monitoring 2 ensures “there is proper documentation prior to the disbursement of federal financial aid. This action does not affect which students are eligible to attend EGCC and under this status, the school must still ensure students get their financial aid in a timely manner.”
“This kind of came out of the blue for us. We’ve been under a program review with the department since February and we’re still kind of wasn’t quite sure where we were with that review. So this directive came out that it’s transferring us to Heightened Cash Management 2 from Advanced Payment,” said Geoghegan.
Geoghegan said Advanced Payment is similar to Heightened Cash Management 1, which they hope they are put on soon.
“Students with Pell, we’re still accepting Pell, there’s no impact on the students whatsoever. It’s just really an impact internally as to how we process and draw down Pell Grant funds. It’s going to be an additional burden on our financial aid department,” said Geoghegan.
Geoghegan said it helps that the college is in a positive cash flow state, but they hope they aren’t in this any longer than the end of the year or the start of next year.
“They want us to change how we’re doing our free college model. We’re going to be submitting them a proposal for that, for their review in the near future, and we’re hoping that they’re going to approve it,” said Geoghegan.
They hope to submit that model sometime this week. Geoghegan said this does not affect any current or incoming students.