Audit 327110

2024-001 Significant Deficiency: Disbursement Notifications (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268) Criteria: In accordance with 34 CFR 668.165, a University, except in the case of a post-withdrawal disbursement, if an institution credits a student ledger account with Direct Loan, the institution must notify the student or parent of: the anticipated date and amount of the disbursement; the student's or parent's right to cancel all or a portion of that loan or loan disbursement, and have the loan proceeds returned to the Secretary; and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement. Statement of Condition: During the audit, it was noted that disbursement notifications provided by the University did not include the amount of the disbursements. Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature. Perspective Information: The audit included a detailed testing of files for 31 students, to which direct loan funds were disbursed. This significant deficiency applies to all 31, indicating an error rate of 100%. Cause and Effect: This issue is caused by an oversight in the development of the template for disbursement notifications sent automatically by the system when credits are made to a student’s account. The issue results in lack of transparency between the institution and the student regarding their financial aid. Recommendation: The University should update the template utilized by the system to generate disbursement notifications to include specific amounts of each type of aid applied to the student’s account. View of Responsible Officials: The University of the Cumberlands acknowledges the finding that electronic disbursement notifications sent to students were missing dollar amounts in the body of the letters. Upon identification of this deficiency, immediate corrective actions were taken in collaboration with software engineers to rectify the notification process before the disbursement of Federal Direct Loans for Fall 2024. The template was promptly updated, and thorough testing was conducted to verify that all required information, including loan type, date, amount, and other pertinent details, would be accurately communicated to students. Going forward, this process will be systematically tested and reviewed each semester to ensure continued compliance. As of the Fall 2024 semester, all students have received the required disbursement notifications that fully adhere to regulatory requirements.

2024-001 Significant Deficiency: Disbursement Notifications (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268) Criteria: In accordance with 34 CFR 668.165, a University, except in the case of a post-withdrawal disbursement, if an institution credits a student ledger account with Direct Loan, the institution must notify the student or parent of: the anticipated date and amount of the disbursement; the student's or parent's right to cancel all or a portion of that loan or loan disbursement, and have the loan proceeds returned to the Secretary; and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement. Statement of Condition: During the audit, it was noted that disbursement notifications provided by the University did not include the amount of the disbursements. Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature. Perspective Information: The audit included a detailed testing of files for 31 students, to which direct loan funds were disbursed. This significant deficiency applies to all 31, indicating an error rate of 100%. Cause and Effect: This issue is caused by an oversight in the development of the template for disbursement notifications sent automatically by the system when credits are made to a student’s account. The issue results in lack of transparency between the institution and the student regarding their financial aid. Recommendation: The University should update the template utilized by the system to generate disbursement notifications to include specific amounts of each type of aid applied to the student’s account. View of Responsible Officials: The University of the Cumberlands acknowledges the finding that electronic disbursement notifications sent to students were missing dollar amounts in the body of the letters. Upon identification of this deficiency, immediate corrective actions were taken in collaboration with software engineers to rectify the notification process before the disbursement of Federal Direct Loans for Fall 2024. The template was promptly updated, and thorough testing was conducted to verify that all required information, including loan type, date, amount, and other pertinent details, would be accurately communicated to students. Going forward, this process will be systematically tested and reviewed each semester to ensure continued compliance. As of the Fall 2024 semester, all students have received the required disbursement notifications that fully adhere to regulatory requirements.