Finding Text
2024 – 002: Eligibility: Loan Notifications
Federal Agency: U.S. Department of Education
Federal Program Title: Student Financial Assistance
ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period: July 1, 2023 through June 30, 2024
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or
parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s
right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to
the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by
which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH
Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the
funds are disbursed by EFT payment or master check.
Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain
internal controls designed to reasonably ensure compliance with federal laws, regulations, and program
compliance requirements.
Condition: The University did not properly notify students when loans were credited to the student's
ledger account.
Questioned costs: None.
Context: During our Eligibility testing of 40 students, we identified that there was 1 student that
received loan disbursements however, did not receive the required notification for the Fall 2023 term
loan disbursement.
Cause: Due to a clerical error, the Fall 2023 loan notifications was not sent to the student.
Effect: Tailored award disbursement notifications inform the student or parent of the right to cancel all
or a portion of that loan or loan disbursements and have the loan proceeds returned to the holder of
that loan. The notifications also outline the procedure and time by which the student or parent must
notify the institution that he or she wishes to cancel the loan.
Repeat finding: Yes, 2023-003
Recommendation: We recommend the University evaluate its procedures around disbursements of
loans and ensure that notifications of disbursements are sent and contain all the required elements
outlined in the FSA handbook.
Views of responsible officials: There is no disagreement with the audit finding.