Finding 1090052 (2024-007)

Criteria: According to federal regulations 34CFR 674.19, institutions must retain an original or electronically signed Master Promissory Note for at least three years after all loans made under the Master Promissory Note are satisfied. In addition, 2CFR 200.303 requires the entity to maintain internal controls to provide reasonable assurance that the entity is managing the Federal award in compliance with Federal statues, regulations and the terms and conditions of the Federal award. Condition: During testing of Perkins Loan Recordkeeping and Record Retention, we identified that the University could not provide a signed promissory note for five out of 25 loans selected for testing. Cause: The absence of signed forms may be due to inadequate oversight in the loan documentation process or a lapse in following established procedures for collecting and retaining signed forms. Effect: The lack of signed Perkins Loan forms in the files could result in non-compliance with federal regulations and creates challenges in enforcing loan agreements. Questioned Costs: None Context: During testing of Perkins Loan Recordkeeping and Record Retention we identified that the University could not provide a signed promissory note for five out of 25 loans (20%) selected for testing. The account status was current with ongoing payments for all five loans. Repeat Finding: No Recommendation: It is recommended that the institution reviews and strengthens its procedures for collecting and retaining signed promissory notes. This may include a review of all outstanding Perkins loan borrowers and review of related documentation to ensure a Master Promissory Note has been signed and retained. View of responsible individuals: Management understands the recommendation and the need to retain the records of former students. While we are certain that required documentation exists or existed at one time, the passage of time and lack of digital backups impaired our ability to produce the documents. Since the loans related to the missing documents are currently in repayment status, we feel that provides assurance that the former students did sign the loan agreement. However, we understand the need to retain all critical forms for our students.