Finding Text
2024-006. FINDING (Noncompliance with Perkins Loans’ Retention of Records Requirements)
Federal Department: U.S. Department of Education
Assistance Listing Number: 84.038
Cluster Name: Student Financial Assistance Cluster
Program Name: Federal Perkins Loan Program
Award Number: None
Questioned Cost: None
Program Expenditures: $1,938,618
Cluster Expenditures: $32,781,904
Governors State University (University) did not maintain a copy of the master promissory note (MPN) for a Perkins Loan program loan.
CONDITION
During testing of Perkins Loan receivables, we identified 1 of 12 (8%) students with a missing MPN.
CRITERIA
The Code of Federal Regulations (34 CFR 674.19(e)) requires the University to retain a record of disbursements for each loan made to a borrower on a promissory note. In addition, the University is required to keep the original MPN until the loans are satisfied. If required to release original documents in order to enforce the loan, the University must retain certified true copies of those documents.
CAUSE
University officials stated the University maintains copies of the MPNs; however, the one MPN pertained to a Perkins Loan disbursed over 18 years ago. Consequently, it may have been misplaced due to staffing changes over the years.
EFFECT
Failure to properly maintain loan documentation may result in inaccurate loan balances, potential disputes with borrowers, and noncompliance with federal regulations. (Finding Code No. 2024-006)
RECOMMENDATION
We recommend the University improve its procedures to ensure compliance with records retention requirements.
UNIVERSITY RESPONSE
The University agrees with this finding and accepts the recommendation. Existing University procedures ensure MPNs and other Perkins-related documentation requirements are properly maintained. The University will continue its ongoing process of reviewing Perkins documentation to comply with the requirements.