Case Study

Professor: Dr. Schmidt, CMA, CPA.

Advance Auditing Theory and Application

January 30th, 2020

Week 3 Case ACL Project – Pell Grants

Universities and Colleges offer scholarships to students with certain requirements, among them: low economic resources, good academic GPA, and full-time students. According to the article “The pell and the poor: A regression-discontinuity analysis of on-time college enrollment” by Rubin, R. B. (2011), it indicates that the costs of a higher education have risen in recent years, and these costs have to add books, housing, transportation, food, among others; hindering the economic capacity of low-income people access to vocational training, that is why the importance of pell grants, that is why students who aspire to higher education apply to receive these grants based on family or individual income, depending on the case of each applicant. (Rubin, R. B. (2011). Due to the demand of people who need financial help to study, pell grants have become a benefit that all students want. The control of the pell grant is managed by each institution that is why the institutions need to maintain a rigorous control to determine the applicability of each student and thus avoid a risk of fraud.

The purpose of this paper is to analyze the information provided in case 6-83 of the chapter in the book "Auditing" by Johnstone K., Gramling AQ., Rittenberg L. (2014), in which it is required that a the pell grants granted to students from different universities, where the maximum amount per student is $ 3125 per school year and a maximum amount of $ 1045 per semester; each situation is different since the pell grant program is offered depending on the financial need and the amount of credits the student takes, in this way the percentage of money that corresponds to each student is determined. The audit will be performed using the ACL (Audit Command Language) program. With the analysis of the databases, it will be determined if there are students receiving more help than they are allowed, duplicates in social security numbers or if there is the same person using different social security number, and if there is any student who does not qualify for the pell grant and yet he / she is getting it.

Condition Number 1 :

1. In this procedure the objective is to analyze if there are students with larger amounts per year limited to $ 3125. To perform this analysis, the Grant file was used by modifying the Social Security Number (SSN) field of numeric format to ASCII, to make a summary with the fields of SSN, Amount, Last, and, First; in this way a new file is created which will be called Student Totals. Using the student total file, 3 students were found with an amount greater than $ 3125.

2. 2. A filter was created with the expression Last = "student 1 Last Name" OR Last = "Student 2 Last Name" ... and so on until you enter the last names of the nine students. As a result, a report of 27 transactions was obtained divided by 9 students.

Condition Number 2:

1. This procedure is to verify if more than one person is using or has the same social security number. The procedure was performed using the Grant file with an extract data using the equation TERM = 1, naming the report or file obtained "Term 1" and so on with the other terms (TERM = 2; Term = 3). The results were the following:

 Term 1 was zero duplicated.

2. Term 2, two transactions were found, which consists of the same social security but different name, different schools.

3. Term 3, and found two transactions, which consists of the same social security but different name, different schools.

Condition Number 3

The objective of this analysis is to identify if there is a student who is using two different social security numbers. The procedure is to use the extracted files of Term 1, Term 2, and Term 3 of Condition 2. The analysis was done in duplicate last names, Sequence in the "Last" file and review each duplicate surname list for Identify if there were duplicate First names. The results were the following:

Term 1, zero duplicates.

Term 2, 12 duplicates of surnames were found.

Term 3, 13 duplicates of surnames were found.

The Sequence analysis showed zero sequence error detected in all terms and of all the 3 terms only one person was found sharing the same name and surname, but with different social security and different school.

Condition 4

The objective of this analysis is to identify if any student with the code 5 which means "0%" in financial need, that is to say, is not allowed to receive pell grant is receiving it. This analysis was carried out using the Grant file, with the expression NEED = 5 AND AMOUNT> 0, that is, any student with code 5 who has a quantity in that field greater than "0". As a result, it was obtained that the student Manuel, Roy with social security number: 206098789, in school 4, term 3 and with status with code 5 received $ 1,041.06, which is the maximum that is granted to a student with code in NEED 1 per semester.

References

Johnstone K., Gramling AQ., Rittenberg L. ( 2014) Auditimg. 9Th Edition. Chapter 6th . Mason,

OH.South-Western Cengage Learning.

Rubin, R. B. (2011). The pell and the poor: A regression-discontinuity analysis of on-time

college enrollment. Research in Higher Education, 52(7), 675-692.

doi:http://dx.doi.org/10.1007/s11162-011-9215-6