Audit 292736

Finding 2023-001 –Special Tests and Provisions Grantor(s): Department of Education Program: Student Financial Aid Cluster Assistance Listing #: Various Award Title: Student Financial Aid Cluster Award Year: 6/2022- 5/2023 Award #: N/A Pass-through #: Not applicable Criteria Per the 2022 OMB Compliance Supplement, at the time an institution makes a disbursement to a student, it must confirm that the student is eligible for the funds being disbursed (34 CFR 668.164(b)(3)). Additionally, the institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check (34 CFR 668.165). Also, where disbursements created a credit balance in the student account and the student or parent did not provide an authorization for the institution to retain funds, the institution is required to provide the credit balance to the student within 14 days of the date the balance was created (34 CFR 668.164(h)(2)). An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. Condition Disbursements to or on behalf of students Through testing disbursements to or on behalf of students enrolled at the University, it was noted that 2 students out of a sample of 25 did not have evidence that the student file was reviewed to ensure all disbursement requirements were satisfied prior to the first disbursement to the student. For one of these students, the date of review was subsequent to the date of the first disbursement to the student. For the second student, there was no date of review. Additionally, it was noted that 3 students out of the same sample of 25 did not receive notification of their disbursements for the Fall 2022 academic term. The students received disbursements on August 16th, 12th, and 14th, respectively, and did not receive notification of these disbursements. Through testing disbursements to or on behalf of students enrolled at the University, it was noted that 1 student out of the same sample of 25 had a credit balance that was not refunded within the required 14-day period. For this particular student, the credit balance was created on January 13, 2023 and refunded to the student on February 2, 2023, which is 20 days later. Verification Through testing of verification, 1 student out of a sample of 25 was not verified even though the student was selected for verification. Cause Disbursements to or on behalf of students The cause of the finding related to the 2 students without evidence of review to ensure all disbursement requirements were met prior to the first disbursement to the student was due to lack of recording the review within the student account. The cause of the finding related to the 3 students who did not receive notification of their disbursements for the Fall 2022 academic term was a University system error during the period of August 9, 2022 through August 16, 2022 which sent required disbursement notifications to only those students with last names beginning with letters A-Po. All other students with last names outside this range did not receive the required notifications during this time period. The cause of the credit balance refund finding is due to inadequate review when reviewing the report showing all students with credit balances and the date on which the credit balance was created. Verification The cause of the finding was inadequate review of the student file as management incorrectly thought the student was included in verification type v1, which had waived verification requirements during FY2023. Effect Disbursements to or on behalf of students The students could have received an inappropriate amount of financial aid as the review of disbursement requirements was not performed prior to disbursement. For these two students, subsequent review performed by management revealed that they met all disbursement requirements. The students did not receive timely notification that their financial aid was disbursed. The student received their refund later than the deadline required by the regulations. Verification The student could have received an inappropriate amount of financial aid as they were flagged for verification that ultimately was not performed. Questioned Costs None as students were eligible for the aid they received, and the aid was disbursed at the correct amount. Recommendation Management should enhance their monitoring controls over student disbursements to ensure the student has met disbursement requirements prior to first disbursement and students are notified about their disbursements. The enhanced control should include a second level of review to ensure files are appropriately reviewed and students are appropriately notified prior to disbursement. Management should also enhance their monitoring control over credit balance refunds to ensure refunds are made within the required timeframe. The enhanced control should include updating \the report used to monitor the aging of student credit balances. Verification Management should enhance its monitoring control for review of verification procedures being completed. The enhanced control should include a second level of review to ensure that all students selected for verification procedures have been verified accurately and timely.

Finding 2023-001 –Special Tests and Provisions Grantor(s): Department of Education Program: Student Financial Aid Cluster Assistance Listing #: Various Award Title: Student Financial Aid Cluster Award Year: 6/2022- 5/2023 Award #: N/A Pass-through #: Not applicable Criteria Per the 2022 OMB Compliance Supplement, at the time an institution makes a disbursement to a student, it must confirm that the student is eligible for the funds being disbursed (34 CFR 668.164(b)(3)). Additionally, the institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check (34 CFR 668.165). Also, where disbursements created a credit balance in the student account and the student or parent did not provide an authorization for the institution to retain funds, the institution is required to provide the credit balance to the student within 14 days of the date the balance was created (34 CFR 668.164(h)(2)). An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. Condition Disbursements to or on behalf of students Through testing disbursements to or on behalf of students enrolled at the University, it was noted that 2 students out of a sample of 25 did not have evidence that the student file was reviewed to ensure all disbursement requirements were satisfied prior to the first disbursement to the student. For one of these students, the date of review was subsequent to the date of the first disbursement to the student. For the second student, there was no date of review. Additionally, it was noted that 3 students out of the same sample of 25 did not receive notification of their disbursements for the Fall 2022 academic term. The students received disbursements on August 16th, 12th, and 14th, respectively, and did not receive notification of these disbursements. Through testing disbursements to or on behalf of students enrolled at the University, it was noted that 1 student out of the same sample of 25 had a credit balance that was not refunded within the required 14-day period. For this particular student, the credit balance was created on January 13, 2023 and refunded to the student on February 2, 2023, which is 20 days later. Verification Through testing of verification, 1 student out of a sample of 25 was not verified even though the student was selected for verification. Cause Disbursements to or on behalf of students The cause of the finding related to the 2 students without evidence of review to ensure all disbursement requirements were met prior to the first disbursement to the student was due to lack of recording the review within the student account. The cause of the finding related to the 3 students who did not receive notification of their disbursements for the Fall 2022 academic term was a University system error during the period of August 9, 2022 through August 16, 2022 which sent required disbursement notifications to only those students with last names beginning with letters A-Po. All other students with last names outside this range did not receive the required notifications during this time period. The cause of the credit balance refund finding is due to inadequate review when reviewing the report showing all students with credit balances and the date on which the credit balance was created. Verification The cause of the finding was inadequate review of the student file as management incorrectly thought the student was included in verification type v1, which had waived verification requirements during FY2023. Effect Disbursements to or on behalf of students The students could have received an inappropriate amount of financial aid as the review of disbursement requirements was not performed prior to disbursement. For these two students, subsequent review performed by management revealed that they met all disbursement requirements. The students did not receive timely notification that their financial aid was disbursed. The student received their refund later than the deadline required by the regulations. Verification The student could have received an inappropriate amount of financial aid as they were flagged for verification that ultimately was not performed. Questioned Costs None as students were eligible for the aid they received, and the aid was disbursed at the correct amount. Recommendation Management should enhance their monitoring controls over student disbursements to ensure the student has met disbursement requirements prior to first disbursement and students are notified about their disbursements. The enhanced control should include a second level of review to ensure files are appropriately reviewed and students are appropriately notified prior to disbursement. Management should also enhance their monitoring control over credit balance refunds to ensure refunds are made within the required timeframe. The enhanced control should include updating \the report used to monitor the aging of student credit balances. Verification Management should enhance its monitoring control for review of verification procedures being completed. The enhanced control should include a second level of review to ensure that all students selected for verification procedures have been verified accurately and timely.