Finding Text
2024-002 – Direct Loan Reconciliations
Federal Agency: U.S. Department of Education
Federal Program Title: Student Financial Assistance Cluster
Federal Assistance Listing Number: 84.268
Award Period: 7/1/2023 – 6/30/2024
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The Code of Federal Regulations, 34 CFR 685.300(b)(5) requires an institution to reconcile their records with the Direct Loan funds received from the Secretary and the Direct Loan disbursement records submitted to and accepted by the Secretary monthly.
Condition: Direct loan reconciliations between the Common Origination and Disbursement (COD), G5 and student accounts were not documented as performed during the year.
Questioned Costs: None
Context: While testing direct loan reconciliations, it was noted that the University was reconciling direct loan activity on nearly a daily basis. However, the University did not maintain supporting documentation that the reconciliation process took place.
Cause: There was turnover at the University and not all documentation was maintained or could be located.
Effect: The University is not complying with internal policy and federal requirements to ensure funds are properly reconciled.
Repeat Finding: Yes, prior year finding 2023-002.
Recommendation: The University should ensure all necessary employees receive proper training, support, and time to follow the University’s policies and federal requirements related to monthly reconciliations. There should be a process to maintain all reconciliations as support performance on a monthly basis.
Views of Responsible Officials: Management agrees with the finding.