Finding 1117241 (2024-001)

Section III – Federal Award Findings and Questioned Costs Finding 2024-001: Disbursement Notification Federal Agency: Department of Education Program: Federal Direct Student Loans and Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) Assistance Listing #: 84.268 and 84.379 Award #: Various Award Year: 2023-2024 Criteria: When Direct Loans or TEACH1 funds are being credited to a student’s account on behalf of the federal government, the 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 (a minimum of 14 or 30 days depending on confirmation process). Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than seven days after, crediting the student’s account and must give the student 30 days (instead of 14) to cancel all or part of the loan. Condition: During the 2024 award year, thirteen out of the twenty-five students tested in our sample of the disbursement compliance requirement noted above were not notified in compliance with the above-noted requirement. For eleven out of the thirteen exceptions, there was not timely notification of the disbursement of federal aid to the student in accordance with the timelines outlined in the compliance requirement above. For ten out of the eleven students, notification of disbursement was sent between 9 and 60 days subsequent to disbursement. For one out of the eleven students, management was unable to provide evidence of disbursement notification. For two out of the thirteen exceptions, the notifications sent to the students did not include the dollar amounts disbursed or the date of disbursement. For these two students, management was unable to provide evidence of subsequent disbursement notification. Questioned Costs: None. Cause: The University’s internal student information system, PeopleSoft, is configured to automatically send students notifications of federal aid loan disbursements within the required timelines. However, in April and May of 2024, a new staff member in the Office of Student Financial Aid and Scholarships erroneously checked a manual Peoplesoft flag, thereby preventing subsequent disbursement notifications. This mistake occurred because the electronic procedure the staff member followed was incomplete due to a missing screen shot which led to the inadvertent mistake. In June the University identified the issue through subsequent manual reviews and sent notifications to the affected students, although outside the required timelines. Additionally, in January 2024, the initial run of the loan notifications for the spring 2024 semester was missing certain required data, such as dollar amounts and disbursement dates. This occurred because one of the queries within the PeopleSoft communication generation process failed to complete due to a data merge issue combined with a large data input resulting in blank information on certain of the notifications. Effect: The University did not timely/accurately send notifications to students regarding disbursements of federal aid in accordance with the above-noted compliance requirement. Recommendation: We recommend the University remain focused on this compliance requirement and enhance its monitoring of automated controls (such as through manual reviews) to ensure students are notified timely of disbursements and that all required data is included within each notification. Additionally, we recommend the University continue to monitor the quality control steps installed in award year 2024 to ensure compliance. Views of Responsible Officials/Management Response: See Management’s view and corrective action plan included at the end of this report.