Finding 2023-001 - Inappropriate Amounts Included in Loan Notification Letters (Significant Deficiency)
Grantor: U.S. Department of Education
Program: Student Financial Assistance Cluster
Assistance Listing #: 84.268
Award Title: Federal Direct Student Loan Program
Award Years: 7/2022 – 6/2023
Criteria
34 CFR Section 668.165 (a)(1-2):
(a) Notices
1. Before an institution disburses title IV, HEA program funds for any award year, the
institution must notify a student of the amount of funds that the student or his or her parent
can expect to receive under each title IV, HEA program, and how and when those funds will
be disbursed. If those funds include Direct Loan program funds, the notice must indicate
which funds are from subsidized loans, which are from unsubsidized loans, and which are
from PLUS loans.
2. Except in the case of a post-withdrawal disbursement made in accordance with §
668.22(a)(5), if an institution credits a student ledger account with Direct Loan, Federal
Perkins Loan, or TEACH Grant program funds, the institution must notify the student or
parent of—
i. The anticipated date and amount of the disbursement;
ii. The student's or parent's right to cancel all or a portion of that loan, loan
disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan
proceeds or TEACH Grant proceeds returned to the Secretary; and
iii. The procedures and time by which the student or parent must notify the institution
that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement.
Condition
We selected a sample of 60 students who were disbursed federal student financial assistance to validate that
Ensign College (the College) was compliant with the U.S. Department of Education disbursement
requirements, including validating that the student and/or parent received the appropriate notifications for
Federal Direct Loans. For one sample, the College did not appropriately communicate the date and
amounts of the loan disbursement(s). Additionally, for two samples, the students did not receive a loan
disbursement letter prior to title IV funds being disbursed during the Fall 2023 semester.
Cause
For each of the conditions above, management identified errors in the student information system
configuration. In the instance where disbursement dates and amounts were not included in the
communication, the system incorrectly captured the student’s name rather than the date and amount of
disbursements. In the two instances where no loan disbursement letters were sent, the system was not
updated to reflect the new academic year commencing with the Fall 2023 semester, and as a result, no
notification letters were being sent prior to the title IV disbursement for that semester. This was due to lack
of training provided to financial aid staff.
Effect
Accurate communication of loan disbursement information helps students determine whether they want
to accept or cancel the loan. Furthermore, this information is reviewed by the student to understand their
responsibility to repay the loan and how much they will owe upon repayment.
Questioned Costs
None
Recommendation
We recommend that the College update the system configuration so that all loan disbursement
information is completely and accurately included in the loan notification letters and that those letters are
distributed to the student and/or parent in a timely manner. We also recommend the College enhance
their existing control process by performing validation checks to ensure the loan disbursement
notification is complete and accurate and provide adequate training to staff responsible for setting up new
academic years in their system.
Management’s Views and Corrective Action Plan:
Management’s response is reported in management’s views and corrective action plan included at the end
of this report.
Finding 2023-002 - Untimely Return of Title IV Requirements
Grantor: U.S. Department of Education
Program: Student Financial Assistance Cluster
Assistance Listing #: 84.268, 84.063
Award Titles: Federal Direct Student Loan Program, Federal Pell Grant Program
Award Years: 7/2022 – 6/2024
Criteria
34 CFR 668.173(b)
(b) Timely return of title IV, HEA program funds. In accordance with procedures established by the
Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds
timely if—
1. The institution deposits or transfers the funds into the bank account it
maintains under § 668.163 no later than 45 days after the date it
determines that the student withdrew.
Condition
Of the 116 students that received federal student financial assistance and withdrew from the College during
the fiscal year, we selected 12 students for testing compliance with the return of title IV fund requirements.
Of the 12 students selected, two instances were noted during the Fall 2023 semester in which the return of
title IV funds was not completed within 45 days. For the two instances, funds were returned 88 and 82
days, respectively, from the date in which the College determined that the students withdrew.
Cause
The College experienced staffing turnover in Fall 2023. As a result, the return of title IV calculations were
performed late, and the title IV funds were returned after the 45-day requirement.
Effect
Title IV funds due to the U.S. Department of Education were returned late. Timely returns of title IV funds
ensure the College is in an accurate receivable position as the school operates on the reimbursement
method for cash management, despite eligibility for the advanced method.
Questioned Costs
None
Recommendation
We recommend that the College identify additional individuals to assist in return of title IV calculations
as backup for staffing turnover and ensure those individuals responsible have adequate training to
perform and review return of title IV fund calculations to ensure timely returns.
Management’s Views and Corrective Action Plan:
Management’s response is reported in management’s views and corrective action plan included at the end
of this report.
Finding 2023-002 - Untimely Return of Title IV Requirements
Grantor: U.S. Department of Education
Program: Student Financial Assistance Cluster
Assistance Listing #: 84.268, 84.063
Award Titles: Federal Direct Student Loan Program, Federal Pell Grant Program
Award Years: 7/2022 – 6/2024
Criteria
34 CFR 668.173(b)
(b) Timely return of title IV, HEA program funds. In accordance with procedures established by the
Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds
timely if—
1. The institution deposits or transfers the funds into the bank account it
maintains under § 668.163 no later than 45 days after the date it
determines that the student withdrew.
Condition
Of the 116 students that received federal student financial assistance and withdrew from the College during
the fiscal year, we selected 12 students for testing compliance with the return of title IV fund requirements.
Of the 12 students selected, two instances were noted during the Fall 2023 semester in which the return of
title IV funds was not completed within 45 days. For the two instances, funds were returned 88 and 82
days, respectively, from the date in which the College determined that the students withdrew.
Cause
The College experienced staffing turnover in Fall 2023. As a result, the return of title IV calculations were
performed late, and the title IV funds were returned after the 45-day requirement.
Effect
Title IV funds due to the U.S. Department of Education were returned late. Timely returns of title IV funds
ensure the College is in an accurate receivable position as the school operates on the reimbursement
method for cash management, despite eligibility for the advanced method.
Questioned Costs
None
Recommendation
We recommend that the College identify additional individuals to assist in return of title IV calculations
as backup for staffing turnover and ensure those individuals responsible have adequate training to
perform and review return of title IV fund calculations to ensure timely returns.
Management’s Views and Corrective Action Plan:
Management’s response is reported in management’s views and corrective action plan included at the end
of this report.
Finding 2023-001 - Inappropriate Amounts Included in Loan Notification Letters (Significant Deficiency)
Grantor: U.S. Department of Education
Program: Student Financial Assistance Cluster
Assistance Listing #: 84.268
Award Title: Federal Direct Student Loan Program
Award Years: 7/2022 – 6/2023
Criteria
34 CFR Section 668.165 (a)(1-2):
(a) Notices
1. Before an institution disburses title IV, HEA program funds for any award year, the
institution must notify a student of the amount of funds that the student or his or her parent
can expect to receive under each title IV, HEA program, and how and when those funds will
be disbursed. If those funds include Direct Loan program funds, the notice must indicate
which funds are from subsidized loans, which are from unsubsidized loans, and which are
from PLUS loans.
2. Except in the case of a post-withdrawal disbursement made in accordance with §
668.22(a)(5), if an institution credits a student ledger account with Direct Loan, Federal
Perkins Loan, or TEACH Grant program funds, the institution must notify the student or
parent of—
i. The anticipated date and amount of the disbursement;
ii. The student's or parent's right to cancel all or a portion of that loan, loan
disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan
proceeds or TEACH Grant proceeds returned to the Secretary; and
iii. The procedures and time by which the student or parent must notify the institution
that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement.
Condition
We selected a sample of 60 students who were disbursed federal student financial assistance to validate that
Ensign College (the College) was compliant with the U.S. Department of Education disbursement
requirements, including validating that the student and/or parent received the appropriate notifications for
Federal Direct Loans. For one sample, the College did not appropriately communicate the date and
amounts of the loan disbursement(s). Additionally, for two samples, the students did not receive a loan
disbursement letter prior to title IV funds being disbursed during the Fall 2023 semester.
Cause
For each of the conditions above, management identified errors in the student information system
configuration. In the instance where disbursement dates and amounts were not included in the
communication, the system incorrectly captured the student’s name rather than the date and amount of
disbursements. In the two instances where no loan disbursement letters were sent, the system was not
updated to reflect the new academic year commencing with the Fall 2023 semester, and as a result, no
notification letters were being sent prior to the title IV disbursement for that semester. This was due to lack
of training provided to financial aid staff.
Effect
Accurate communication of loan disbursement information helps students determine whether they want
to accept or cancel the loan. Furthermore, this information is reviewed by the student to understand their
responsibility to repay the loan and how much they will owe upon repayment.
Questioned Costs
None
Recommendation
We recommend that the College update the system configuration so that all loan disbursement
information is completely and accurately included in the loan notification letters and that those letters are
distributed to the student and/or parent in a timely manner. We also recommend the College enhance
their existing control process by performing validation checks to ensure the loan disbursement
notification is complete and accurate and provide adequate training to staff responsible for setting up new
academic years in their system.
Management’s Views and Corrective Action Plan:
Management’s response is reported in management’s views and corrective action plan included at the end
of this report.
Finding 2023-002 - Untimely Return of Title IV Requirements
Grantor: U.S. Department of Education
Program: Student Financial Assistance Cluster
Assistance Listing #: 84.268, 84.063
Award Titles: Federal Direct Student Loan Program, Federal Pell Grant Program
Award Years: 7/2022 – 6/2024
Criteria
34 CFR 668.173(b)
(b) Timely return of title IV, HEA program funds. In accordance with procedures established by the
Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds
timely if—
1. The institution deposits or transfers the funds into the bank account it
maintains under § 668.163 no later than 45 days after the date it
determines that the student withdrew.
Condition
Of the 116 students that received federal student financial assistance and withdrew from the College during
the fiscal year, we selected 12 students for testing compliance with the return of title IV fund requirements.
Of the 12 students selected, two instances were noted during the Fall 2023 semester in which the return of
title IV funds was not completed within 45 days. For the two instances, funds were returned 88 and 82
days, respectively, from the date in which the College determined that the students withdrew.
Cause
The College experienced staffing turnover in Fall 2023. As a result, the return of title IV calculations were
performed late, and the title IV funds were returned after the 45-day requirement.
Effect
Title IV funds due to the U.S. Department of Education were returned late. Timely returns of title IV funds
ensure the College is in an accurate receivable position as the school operates on the reimbursement
method for cash management, despite eligibility for the advanced method.
Questioned Costs
None
Recommendation
We recommend that the College identify additional individuals to assist in return of title IV calculations
as backup for staffing turnover and ensure those individuals responsible have adequate training to
perform and review return of title IV fund calculations to ensure timely returns.
Management’s Views and Corrective Action Plan:
Management’s response is reported in management’s views and corrective action plan included at the end
of this report.
Finding 2023-002 - Untimely Return of Title IV Requirements
Grantor: U.S. Department of Education
Program: Student Financial Assistance Cluster
Assistance Listing #: 84.268, 84.063
Award Titles: Federal Direct Student Loan Program, Federal Pell Grant Program
Award Years: 7/2022 – 6/2024
Criteria
34 CFR 668.173(b)
(b) Timely return of title IV, HEA program funds. In accordance with procedures established by the
Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds
timely if—
1. The institution deposits or transfers the funds into the bank account it
maintains under § 668.163 no later than 45 days after the date it
determines that the student withdrew.
Condition
Of the 116 students that received federal student financial assistance and withdrew from the College during
the fiscal year, we selected 12 students for testing compliance with the return of title IV fund requirements.
Of the 12 students selected, two instances were noted during the Fall 2023 semester in which the return of
title IV funds was not completed within 45 days. For the two instances, funds were returned 88 and 82
days, respectively, from the date in which the College determined that the students withdrew.
Cause
The College experienced staffing turnover in Fall 2023. As a result, the return of title IV calculations were
performed late, and the title IV funds were returned after the 45-day requirement.
Effect
Title IV funds due to the U.S. Department of Education were returned late. Timely returns of title IV funds
ensure the College is in an accurate receivable position as the school operates on the reimbursement
method for cash management, despite eligibility for the advanced method.
Questioned Costs
None
Recommendation
We recommend that the College identify additional individuals to assist in return of title IV calculations
as backup for staffing turnover and ensure those individuals responsible have adequate training to
perform and review return of title IV fund calculations to ensure timely returns.
Management’s Views and Corrective Action Plan:
Management’s response is reported in management’s views and corrective action plan included at the end
of this report.