Finding Text
2024-001 – Perkins Loan Recordkeeping and Record Retention
Federal Agency: U.S. Department of Education
Federal Program Title: Federal Perkins Loan Program
Federal Assistance Listing Number: 84.038
Award Period: 7/1/2023 – 6/30/2024
Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters
Criteria or specific requirement: An institution shall keep original promissory notes and repayment schedules until Perkins loans are satisfied. If required to release original documents in order to enforce the loan, the institution must retain certified true copies of those documents. An institution shall keep the original paper promissory note or original paper master promissory note (MPN) and repayment schedules in a locked, fireproof container (34 CFR 674.19(e)(4)).
Condition: Original promissory notes were unable to be located.
Questioned costs: None.
Context: During our testing, we noted 4 instances out of 40 open Perkins loans tested where the University was unable to locate the original promissory note.
Cause: The University did not have the appropriate policies and procedures in place when Perkins loans were awarded to students in order to ensure that recordkeeping and retention regulations were being followed.
Effect: Open loan balances for these loans are not supported by an original promissory note.
Repeat finding: Yes, 2023-001.
Recommendation: We recommend the University evaluate its procedures and policies around recordkeeping and record retention.
Views of responsible officials: Management agrees with the finding. Please refer to the attached corrective action plan.