Audit of Mount Wachusett Community College Objectives, Scope, and Methodology

An overview of the purpose and process of auditing Mount Wachusett Community College.

Overview

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of Mount Wachusett Community College (MWCC) for the period March 1, 2020 through June 30, 2023. When examining employee settlement agreements entered into by MWCC, we extended the audit period to January 1, 2019 through December 31, 2023.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.

Objective	Conclusion
Did MWCC administer the student portion of funding under Section 18004(a)(1) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in accordance with Sections C, D, and E of the United States Department of Education’s (US DOE’s) Higher Education Emergency Relief Fund (HEERF) Frequently Asked Questions (FAQ) Rollup Document?	Yes
Did MWCC administer the institutional portion of funding under Section 18004(a)(1) of the CARES Act in accordance with Section F of US DOE’s HEERF FAQ Rollup Document?	Yes
Did MWCC administer the student portion of funding under Section 314(a)(1) of the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) in accordance with US DOE’s HEERF ll Public and Private Nonprofit Institution (a)(1) Programs ([Catalog of Federal Domestic Assistance, or CFDA] 84.425E and 84.425F) FAQ?	Yes
Did MWCC administer the institutional portion of funding under Section 314(a)(1) of the CRRSAA in accordance with US DOE’s HEERF II Public and Private Nonprofit Institution (a)(1) Programs (CFDA 84.425E and 84.425F) FAQ?	Yes
Did MWCC administer the student portion of funding under Section 2003(a)(1) of the American Rescue Plan Act (ARPA) in accordance with Section B of US DOE’s HEERF lll FAQ?	Yes
Did MWCC administer the institutional portion of funding under Section 2003(a)(1) of the ARPA in accordance with Section C of US DOE’s HEERF lll FAQ?	Yes
Did MWCC update its internal control plan to address the COVID-19 pandemic in accordance with the Office of the Comptroller of the Commonwealth’s (CTR’s) “COVID-19 Pandemic Response Internal Controls Guidance,” dated September 30, 2020?	No; see Finding 1
Did all MWCC employees receive cybersecurity awareness training in accordance with Sections 6.2.3 and 6.2.4 of the Executive Office of Technology Services and Security’s Information Security Risk Management Standard IS.010?	No; see Finding 3
Did MWCC have internal policies and procedures in place for (a) the review and approval of employee settlement agreements, including the language used, and (b) the reporting of employee settlement agreements to CTR? For employee settlement agreements entered into from January 1, 2019 through December 31, 2023, did MWCC follow these policies and did it use non-disclosure, non-disparagement, or similarly restrictive clauses as part of employee settlement agreement language?	No; see Finding 2

To accomplish our audit objectives, we gained an understanding of MWCC’s internal control environment relevant to our objectives by reviewing applicable college policies and procedures, as well as by interviewing MWCC’s staff members and management. In addition, we performed the following procedures to address the objectives.

CARES Act Student Funds

To determine whether MWCC administered the student portion of funding under Section 18004(a)(1) of the CARES Act in accordance with Sections C, D, and E of US DOE’s HEERF FAQ Rollup Document, we obtained a list of 2,772 payments made to students from the CARES Act student-portion funding, totaling $1,387,850, from MWCC’s accounting and finance system during the audit period. We selected a random, statistical sample¹ of 47 payments totaling $23,500 using a 90% confidence level,² a 0% expected error rate,³ and a 5% tolerable error rate⁴ from the list of 2,772 payments and completed the following actions:

• For payments to students enrolled in the spring 2020 semester, we observed student account records, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses in the student account module of MWCC’s accounting and finance system, to determine whether the students:

• were enrolled as of March 13, 2020 and participating in in-person classes;
• were eligible to apply for Title IV funding or Signed a Free Application for Federal Student Aid (FAFSA) Acknowledgment Form;
• were not dual enrollment students;
• were not second-chance Pell Grant participants; and
• did not receive over $500.

• For payments to students enrolled in the fall 2020 semester, we observed student account records, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses in the student account module of MWCC’s accounting and finance system, to determine whether the students:

• were enrolled in the fall semester for at least six credits;
• were eligible to apply for Title IV funding or signed a FAFSA Acknowledgment Form;
• were not dual enrollment students;
• were not second-chance Pell Grant participants; and
• did not receive over $500.

• For both semesters, we compared the amount each student received in the student account module to the amount from the transaction data.

Based on the results of our testing, we determined that, during the audit period, MWCC administered the student portion of funding under Section 18004(a)(1) of the CARES Act in accordance with Sections C, D, and E of US DOE’s HEERF FAQ Rollup Document.

CARES Act Institutional Funds

To determine whether MWCC administered the institutional portion of funding under Section 18004(a)(1) of the CARES Act in accordance with Section F of US DOE’s HEERF FAQ Rollup Document, we obtained from MWCC’s accounting and finance system a list of 47 CARES Act institutional transactions, totaling $1,169,747, from the audit period. We selected a random, nonstatistical sample of 10 transactions, totaling $51,906, and reviewed supporting documentation (invoices, purchase orders, receipts, emails, etc.) to identify the nature of the expense and determine whether the expense was allowable under the HEERF FAQ Rollup Document, specifically Questions 29–50.

Based on the results of our testing, we determined that, during the audit period, MWCC administered the institutional portion of funding under Section 18004(a)(1) of the CARES Act in accordance with Section F of US DOE’s HEERF FAQ Rollup Document.

CRRSAA Student Funds

To determine whether MWCC administered the student portion of funding under Section 314(a)(1) of the CRRSAA in accordance with US DOE’s HEERF ll Public and Private Nonprofit Institution (a)(1) Programs (CFDA 84.425E and 84.425F) FAQ, we obtained from MWCC’s accounting and finance system a list of 1,815 payments made to students from the CRRSAA student-portion funding, totaling $1,173,200, made during the audit period. We selected a random, statistical sample of 47 payments, totaling $30,000, using a 90% confidence level, a 0% expected error rate, and a 5% tolerable error rate from the list of 1,815 payments and completed the following actions:

• For payments to students enrolled in the fall 2020 semester, we observed student account records in the student account module of MWCC’s accounting and finance system, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses, to determine whether the students:

• were enrolled for at least six credits or were noncredit students;
• were eligible to apply for Title IV funding or signed a FAFSA Acknowledgment Form;
• were not dual enrollment students;
• were not second-chance Pell Grant participants; and
• did not receive over $500.

• For the payments to students enrolled in the spring 2021 semester, we observed student account records in the student account module of MWCC’s accounting and finance system, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses, to determine whether the students:

• were enrolled for at least three credits or were noncredit students;
• were eligible to apply for Title IV funding or signed a FAFSA Acknowledgment Form;
• were not dual enrollment students;
• were not second-chance Pell Grant participants; and
• did not receive over $500, unless the student was enrolled in a healthcare program where classes were disrupted by the lack of clinical sites—these students were eligible for a fixed amount of $2,000.

• For payments to students enrolled in the fall 2021 semester, we observed student account records in the student account module of MWCC’s accounting and finance system, including students’ financial aid awards, financial aid enrollments, account details and enrollment statuses, to determine whether the students:

• were enrolled for at least six credits or were noncredit students;
• were eligible to apply for Title IV funding or signed a FAFSA Acknowledgment Form; and
• did not receive over $500, unless the student was eligible for a Pell Grant—these students were eligible for $750—or enrolled in a healthcare program where classes were disrupted by the lack of clinical sites—these students were eligible for a fixed amount of $2,000.

• For all semesters, we compared the amount each student received in the student account module to the amount from the transaction data.

Based on the results of our testing, we determined that, during the audit period, MWCC ensured that it administered the student portion of funding under Section 314(a)(1) of the CRRSAA in accordance with US DOE’s HEERF ll Public and Private Nonprofit Institution (a)(1) Programs (CFDA 84.425E and 84.425F) FAQ.

CRRSAA Institutional Funds

To determine whether MWCC administered the institutional portion of funding under Section 314(a)(1) of the CRRSAA in accordance with US DOE’s HEERF II Public and Private Nonprofit Institution (a)(1) Programs (CFDA 84.425E and 84.425F) FAQ, we obtained from MWCC’s accounting and finance system a list of 274 CRRSAA institutional transactions, totaling $4,243,299, from the audit period. From this list, we selected a random, nonstatistical sample of 40 transactions, totaling $2,246,183, and reviewed supporting documentation (invoices, purchase orders, receipts, emails, etc.) to identify the nature of the expense and determine whether the expense was allowable under the HEERF II FAQ document, specifically Questions 10, 11, 15, 18, 19, 22, and 25.

Based on the results of our testing, we determined that, during the audit period, MWCC administered the institutional portion of funding under Section 314(a)(1) of the CRRSAA in accordance with US DOE’s HEERF II Public and Private Nonprofit Institution (a)(1) Programs (CFDA 84.425E and 84.425F) FAQ.

ARPA and Supplemental Support under the ARPA Student Funds

To determine whether MWCC administered the student portion of funding under Section 2003(a)(1) of the ARPA in accordance with Section B of US DOE’s HEERF lll FAQ, we obtained from MWCC’s accounting and finance system both a list of 4,621 payments made to students from the ARPA student-portion funding, totaling $4,873,579, and a list of 948 payments made to students from the SSARPA student-portion funding, totaling $451,075, made during the audit period.

From the ARPA payments, we selected a random, statistical sample of 47 payments, totaling $48,450, using a 90% confidence level, a 0% expected error rate, and a 5% tolerable error rate. From the SSARPA payments, we selected a random, nonstatistical sample of 60 transactions, totaling $28,800. For each payment in our samples, we completed the following actions:

• For payments to students enrolled in the fall 2021 semester, we observed student account records in the student account module of MWCC’s accounting and finance system, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses, to determine whether:

• noncredit students received no more than $500;
• Pell Grant–eligible students enrolled in at least six credits received no more than $750;
• non–Pell Grant eligible students enrolled in at least six credits received no more than $500; and
• students in healthcare programs where classes were disrupted by a lack of clinical sites for an average of four months received no more than $2,000.

• For payments to students enrolled in the spring 2022 semester, we observed student account records in the student account module of MWCC’s accounting and finance system, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses, to determine whether:

• noncredit students received no more than $500;
• Pell Grant–eligible students enrolled in at least four credits received no more than $1,250; and
• non–Pell Grant eligible students enrolled in at least four credits received no more than $1,000.

• For payments to students enrolled in the fall 2022 semester, we observed student account records in the student account module of MWCC’s accounting and finance system, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses:

• Pell Grant–eligible students enrolled in at least six credits received no more than $1,600 and
• non–Pell Grant eligible students enrolled in at least six credits received no more than $1,350.

• For payments to students enrolled in the spring 2023 semester, we observed student account records in the student account module of MWCC’s accounting and finance system, including students’ financial aid awards, financial aid enrollments, account details, and enrollment statuses:

• Pell Grant–eligible students enrolled in at least three credits who had gross need of over $2,000—students received no more than $550­—and
• non–Pell Grant eligible students enrolled in at least three credits who had gross need of over $2,000­—students received no more than $340.

Based on the results of our testing, we determined that, during the audit period, MWCC administered the student portion of funding under Section 2003(a)(1) of the ARPA in accordance with Section B of US DOE’s HEERF III FAQ.

ARP and SSARPA Institutional Funds

To determine whether MWCC administered the institutional portion of funding under Section 2003(a)(1) of the ARPA in accordance with Section C of US DOE’s HEERF lll FAQ, we obtained from MWCC’s accounting and finance system a list of 45 ARPA institutional transactions, totaling $4,662,274, and a list of 21 SSARPA institutional transactions, totaling $451,975, from the audit period. We reviewed a random, nonstatistical sample of 10 transactions, totaling $589,282, from the ARPA list and all 21 transactions from the SSARPA. For each of these transactions, we reviewed supporting documentation (invoices, purchase orders, receipts, emails, etc.) to identify the nature of the expense and determine whether the expense was allowable under Section 2003(a)(1) of the ARPA in accordance with Section C of US DOE’s HEERF lll FAQ document, specifically Questions 21, 22, 23, 24, 25, 42, 43, 44, and 52.

Based on the results of our testing, we determined that, during the audit period, MWCC administered the institutional portion of funding under Section 2003(a)(1) of the ARPA in accordance with Section C of US DOE’s HEERF lll FAQ.

Internal Control Plan COVID-19 Updates

To determine whether MWCC updated its internal control plan to address the COVID-19 pandemic in accordance with CTR’s “COVID-19 Pandemic Response Internal Controls Guidance,” dated September 30, 2020, we interviewed MWCC’s vice president of finance and reviewed the internal control plan in effect during the audit period, dated June 30th 2020.

See Finding 1 for more information regarding the results of our testing related to MWCC’s updating its internal control plan to address the COVID-19 pandemic.

Cybersecurity Awareness Training

To determine whether MWCC employees received cybersecurity awareness training in accordance with Sections 6.2.3 and 6.2.4 of the Executive Office of Technology Services and Security’s Information Security Risk Management Standard IS.010, we interviewed MWCC employees on how MWCC administers and tracks the completion of its initial and annual data security trainings and its annual Social Engineering Red Flags training. Additionally, we reviewed completion reports from the third-party companies MWCC uses to provide these trainings to its employees to determine whether all new hires completed the initial training and whether all employees took both annual trainings.

From the list of 1,289 employees, we determined that 718 employees were required to take MWCC’s annual Social Engineering Red Flags training by reviewing whether the employee was hired on or before the date the training was implemented. For each of these 718 employees, we reviewed whether they were assigned training and whether the training was completed.

See Finding 3 for more information regarding the results of our testing related to cybersecurity awareness training.

Employee Settlement Agreements

To determine whether MWCC had internal policies and procedures in place for (a) the review and approval of employee settlement agreements, including the language used, and (b) the reporting of employee settlement agreements to CTR, we interviewed MWCC’s vice president of human resources. MWCC stated that it follows CTR’s Settlements and Judgments Policy for any employee settlement agreements involving monetary payments.

To determine whether MWCC entered into employee settlement the agreements that included non-disclosure, non-disparagement, or similarly restrictive clauses, we reviewed language in all 15 employee settlement agreements that MWCC entered into from January 1, 2019 through December 31, 2023. Additionally, we reviewed all 15 employee settlement agreements to determine whether any resulted in the employee receiving a monetary payment. We determined that 1 of the 15 employee settlement agreements resulted in a monetary payment to the employee, which was not processed through CTR. We ensured that this employee settlement agreement was related to unpaid regular time by reviewing payroll records. We further determined that 6 of the 15 employee settlement agreements resulted in monetary payments in the form of lump-sum payments to the six employees. For each of these 6 employee settlement agreements, we determined whether the settlement was handled in accordance with CTR’s Settlements and Judgments policy by reviewing supporting documentation for the following:

• whether MWCC’s legal counsel or the chief financial officer was listed as the central point of contact;
• whether the claimant or claimant’s attorney was provided “Notice of Settlement/Judgment Tax Reporting And Withholdings, Claimant Receipt of W-2, 1099-MISC or 1099-INT Forms”; and
• whether all settlements were reviewed by CTR before the payment.

See Finding 2 for more information regarding the results of our testing of the use of employee settlement agreements by MWCC.

We used both statistical and nonstatistical sampling methods; however, we did not project the results of our testing to any of the corresponding populations. 

Data Reliability Assessment

COVID-19 Funding

To determine the reliability of the data received from MWCC’s accounting and finance system, we interviewed MWCC officials who were knowledgeable about the data. We reviewed the System and Organization Control reports for the system that covered fiscal years 2021 and 2022 and the fiscal year 2023 portion of the audit period. We also tested certain general information system controls (including security management, access controls, configuration management, segregation of duties, and contingency planning) over MWCC’s accounting and finance system.

To determine the reliability of the lists of payments made to students from MWCC’s accounting and finance system funded by the CARES Act, CRRSAA, ARPA, and SSARPA grants, provided by MWCC’s controller, we tested to ensure that there were no duplicates and that all of the data was from within the audit period. Further, we selected a random sample of 20 transactions from each list and matched the student names and identification numbers, COVID-19 funding type codes, and payment amounts to the data in the students’ accounts in MWCC’s accounting and finance system.

To determine the reliability of the CARES Act, CRRSAA, ARPA, and SSARPA institutional transaction lists from MWCC’s accounting and finance system, provided by MWCC’s controller, we tested to ensure that there were no duplicates and that all of the data was from within the audit period. We selected a random sample of 20 transactions from the CRRSAA list and judgmental samples of 5 transactions each from the CARES Act, ARPA, and SSARPA lists and matched the transaction descriptions, amounts, and document codes to the original invoices. Further, we judgmentally selected a total of 35 invoices (20 CRRSAA, 5 CARES Act, 5 ARPA, and 5 SSARPA) and matched the transaction descriptions, amounts, and code identification numbers on the invoices to the data in MWCC’s accounting and finance system.

Cybersecurity Awareness Training

We received from MWCC’s vice president of human resources a list of 2,547 active employees hired before June 30, 2023, which was extracted from the Human Resources Compensation Management System. To determine the reliability of this list, we removed duplicate records because of employees holding more than one position at the college, which resulted in a list of 1,289 employees. We reviewed the date of any terminated employees to ensure that they were not terminated before the beginning of the audit period. In addition, we selected a random sample of 20 employees from the list and matched employee names and identification numbers to hardcopy employee files. Further, we selected a judgmental sample of 20 hardcopy employee files and matched employee names and identification numbers to the employee list.

Employee Settlements

To determine the reliability of the list of employee settlement agreements created by MWCC during the extended audit period of January 1, 2019 through December 31, 2023, we reviewed all 15 employee settlement agreements that we received and determined that 9 employee settlement agreements did not result in lump-sum payments and were therefore not processed through CTR. We requested and received from CTR an independent list of MWCC employee settlement agreements that resulted in a lump-sum payment during the audit period. We then verified that each of the 6 employee settlement agreements that resulted in a lump-sum payment, which were processed through CTR, were the only ones on CTR’s independent list.

Based on the data reliability assessment procedures described above, we determined that the data we obtained was sufficiently reliable for purposes of our audit.

1.    Auditors use statistical sampling to select items for audit testing when a population is large (usually over 1,000) and contains similar items. Auditors generally use a statistics software program to choose a random sample when statistical sampling is used. The results of testing using statistical sampling, unlike those from judgmental sampling, can usually be used to make conclusions or projections about entire populations.

2.    Confidence level is a mathematically based measure of the auditor’s assurance that the sample results (statistic) are representative of the population (parameter), expressed as a percentage.

3.    Expected error rate is the number of errors that are expected in the population, expressed as a percentage. It is based on the auditor’s knowledge of factors such as prior year results, the understanding of controls gained in planning, or a probe sample.

4.    Tolerable error rate is the maximum error in the population that auditors would be willing to accept and still conclude that the result from the sample has achieved the audit objective.

Date published:	December 27, 2024