Finding Text
Statement of Condition: From our testing sample of twenty-five (25) students, we found twenty-two (22)
instances where notices of federal direct loans being credited to a student’s account could not be vouched.
Criteria: In accordance with Volume 4 Chapter 2 of the Federal Student Aid Handbook, the school must
notify the borrower in writing within 30 days of funds being credited to the account: 1) the anticipated date
and amount of disbursement, 2) the right to cancel, and 3) the deadlines to notify the school if they wish to
cancel. In accordance with Volume 2 Chapter 7 of the Federal Student Aid Handbook, a school must keep
comprehensive, accurate program and fiscal records related to its use of FSA Funds. Student records
should be retained to “show a clear audit trail for FSA program expenditures.”
Effect of Condition: We found twenty-two (22) instances where borrower notifications were not retained.
Cause of Condition: The College implemented a new system in the current year.
Recommendation: We recommend the College develop policies and procedures to address this issue.
Management’s Response: Management agrees and will submit a Corrective Action Plan to implement
these recommendations immediately.