FAC Explorer

Finding 1127939 (2024-002)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-03-31
Audit: 352110
Organization: South Carolina State University (SC)
Auditor: Bdo USA PC

AI Summary

  • Core Issue: The University failed to maintain required records for the Federal Perkins Loan Program, including signed promissory notes and repayment schedules.
  • Impacted Requirements: Institutions must keep original loan documents securely and retain repayment records for at least three years, ensuring compliance with federal regulations.
  • Recommended Follow-Up: Enhance internal controls and procedures for recordkeeping to prevent future compliance issues, and complete the Perkins closeout audit by March 31, 2026.

Finding Text

Finding 2024-002 – N. Special Tests and Provisions – Federal Perkins Loan Program Recordkeeping and Record Retention Information on Federal Program(s) – Student Financial Assistance Cluster (ALN 84.038) Criteria or Specific Requirement – Institutions are required to keep original paper promissory notes or original paper master promissory notes and repayment schedules in a locked, fireproof container. The original promissory notes and repayment schedules must be kept until the 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. After the loan obligation is satisfied, the institution shall return the original or a true and exact copy of the note marked "paid in full" to the borrower, or otherwise notify the borrower in writing that the loan is paid in full and retain a copy for the prescribed period. An institution shall retain repayment records, including cancellation and deferment requests for at least three years from the date on which a loan is assigned to the secretary, canceled, or repaid. An institution shall retain disbursement and electronic authentication and signature records for each loan made using a master promissory note for at least three years from the date the loan is canceled, repaid, or otherwise satisfied. When an institution uses a third-party servicer for its Perkins Loan program, the institution must perform due diligence to ensure that the third-party servicer is in compliance with the requirements for the functions the third-party servicer is performing for the institution. Such due diligence could include obtaining and reviewing the third party servicer’s most recent Title IV compliance audit. When an institution uses a third-party servicer for its Federal Perkins Loan Program, the institution must perform due diligence to ensure that the third party servicer is in compliance with the requirements for the functions the third party servicer is performing for the school. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – Certain Federal Perkins Loan Program records selected for testing were missing a signed master promissory note, missing repayment schedules, missing documentation for the first disbursement, missing documentation for the last payment, or missing other documentation. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University was not in compliance with the Federal Perkins Loan Program recordkeeping and record retention requirements. Questioned Costs – None. Context – For 1 of 40 Federal Perkins Loan Program records selected for testing, we noted that 1 record was missing a signed master promissory note and a repayment schedule. Indication of Repeat Finding - This is a repeat of prior year finding 2023-005. Recommendation – We recommend that the University enhance its procedures and internal controls related to Federal Perkins Loan Program recordkeeping and record retention. Views of Responsible Officials – The University acknowledges this finding and during its liquidation of the Federal Perkins Loan Program completed the buyback of certain loans for which the University was not able to provide adequate documentation to assign these loans to the Department of Education. Subsequent to June 30, 2024, the University has completed the following steps in the closeout of its Federal Perkins Loan Program: 1. Notified the Department of Education of the intent to liquidate. 2. Assigned outstanding Perkins loans to the Department of Education and updated NSLDS throughout the assignment process. 3. Purchased loans not qualifying for assignment and submitted cash on hand (Intent and Closeout Form Phase 3 in COD) 4. Remitted the federal share to the Department 5. Submitted final FISAP data (Intent to Closeout Form Phase 4 in COD) The final remaining step for the University to complete closeout of its Federal Perkins Loan Program is to submit a Perkins closeout audit to the Department. This will be submitted as part of the Single Audit for the year ended June 30, 2025, which is due March 31, 2026.

Categories

Student Financial Aid Special Tests & Provisions Procurement, Suspension & Debarment Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 551465 2024-006
    Significant Deficiency
  • 551466 2024-006
    Significant Deficiency
  • 551467 2024-006
    Significant Deficiency
  • 551468 2024-006
    Significant Deficiency
  • 551469 2024-006
    Significant Deficiency
  • 551470 2024-006
    Significant Deficiency
  • 551471 2024-006
    Significant Deficiency
  • 551472 2024-006
    Significant Deficiency
  • 551473 2024-006
    Significant Deficiency
  • 551474 2024-006
    Significant Deficiency
  • 551475 2024-006
    Significant Deficiency
  • 551476 2024-006
    Significant Deficiency
  • 551477 2024-006
    Significant Deficiency
  • 551478 2024-006
    Significant Deficiency
  • 551479 2024-006
    Significant Deficiency
  • 551480 2024-006
    Significant Deficiency
  • 551481 2024-006
    Significant Deficiency
  • 551482 2024-006
    Significant Deficiency
  • 551483 2024-006
    Significant Deficiency
  • 551484 2024-006
    Significant Deficiency
  • 551485 2024-006
    Significant Deficiency
  • 551486 2024-006
    Significant Deficiency
  • 551487 2024-006
    Significant Deficiency
  • 551488 2024-006
    Significant Deficiency
  • 551489 2024-006
    Significant Deficiency
  • 551490 2024-006
    Significant Deficiency
  • 551491 2024-006
    Significant Deficiency
  • 551492 2024-006
    Significant Deficiency
  • 551493 2024-001
    Significant Deficiency Repeat
  • 551494 2024-003
    Significant Deficiency
  • 551495 2024-001
    Significant Deficiency Repeat
  • 551496 2024-003
    Significant Deficiency
  • 551497 2024-002
    Significant Deficiency Repeat
  • 551498 2024-001
    Significant Deficiency Repeat
  • 551499 2024-003
    Significant Deficiency
  • 551500 2024-001
    Significant Deficiency Repeat
  • 551501 2024-003
    Significant Deficiency
  • 551502 2024-004
    Significant Deficiency
  • 551503 2024-005
    Significant Deficiency
  • 551504 2024-003
    Significant Deficiency
  • 1127907 2024-006
    Significant Deficiency
  • 1127908 2024-006
    Significant Deficiency
  • 1127909 2024-006
    Significant Deficiency
  • 1127910 2024-006
    Significant Deficiency
  • 1127911 2024-006
    Significant Deficiency
  • 1127912 2024-006
    Significant Deficiency
  • 1127913 2024-006
    Significant Deficiency
  • 1127914 2024-006
    Significant Deficiency
  • 1127915 2024-006
    Significant Deficiency
  • 1127916 2024-006
    Significant Deficiency
  • 1127917 2024-006
    Significant Deficiency
  • 1127918 2024-006
    Significant Deficiency
  • 1127919 2024-006
    Significant Deficiency
  • 1127920 2024-006
    Significant Deficiency
  • 1127921 2024-006
    Significant Deficiency
  • 1127922 2024-006
    Significant Deficiency
  • 1127923 2024-006
    Significant Deficiency
  • 1127924 2024-006
    Significant Deficiency
  • 1127925 2024-006
    Significant Deficiency
  • 1127926 2024-006
    Significant Deficiency
  • 1127927 2024-006
    Significant Deficiency
  • 1127928 2024-006
    Significant Deficiency
  • 1127929 2024-006
    Significant Deficiency
  • 1127930 2024-006
    Significant Deficiency
  • 1127931 2024-006
    Significant Deficiency
  • 1127932 2024-006
    Significant Deficiency
  • 1127933 2024-006
    Significant Deficiency
  • 1127934 2024-006
    Significant Deficiency
  • 1127935 2024-001
    Significant Deficiency Repeat
  • 1127936 2024-003
    Significant Deficiency
  • 1127937 2024-001
    Significant Deficiency Repeat
  • 1127938 2024-003
    Significant Deficiency
  • 1127940 2024-001
    Significant Deficiency Repeat
  • 1127941 2024-003
    Significant Deficiency
  • 1127942 2024-001
    Significant Deficiency Repeat
  • 1127943 2024-003
    Significant Deficiency
  • 1127944 2024-004
    Significant Deficiency
  • 1127945 2024-005
    Significant Deficiency
  • 1127946 2024-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $24.58M
84.063 Federal Pell Grant Program $12.15M
84.031 Higher Education Institutional Aid $5.26M
10.205 Payments to 1890 Land-Grant Colleges and Tuskegee University $3.22M
10.512 Extension Services at 1890 Colleges and Tuskegee University, West Virginia State College, and Central State University $2.40M
10.912 Environmental Quality Incentives Program $1.25M
84.007 Federal Supplemental Educational Opportunity Grants $939,527
10.524 Scholarships for Students at 1890 Institutions $848,900
93.516 Public Health Training Centers Program $823,482
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $758,070
84.263 Innovative Rehabilitation Training $572,347
84.382 Strengthening Minority-Serving Institutions $571,081
59.059 Congressional Grants $547,273
81.137 Minority Economic Impact $501,018
10.216 1890 Institution Capacity Building Grants $430,370
10.237 From Learning to Leading: Cultivating the Next Generation of Diverse Food and Agriculture Professionals $423,956
84.033 Federal Work-Study Program $388,582
84.425 Education Stabilization Fund $371,663
81.RD Department of Energy $348,846
93.397 Cancer Centers Support Grants $331,898
84.042 Trio Student Support Services $292,913
20.237 Motor Carrier Safety Assistance High Priority Activities Grants and Cooperative Agreements $248,962
84.129 Rehabilitation Long-Term Training $246,583
47.076 Stem Education (formerly Education and Human Resources) $238,428
59.037 Small Business Development Centers $232,426
81.104 Environmental Remediation and Waste Processing and Disposal $223,653
10.937 Partnerships for Climate-Smart Commodities $213,033
10.514 Expanded Food and Nutrition Education Program $185,091
84.264 Rehabilitation Training Technical Assistance Centers $157,940
84.120 Minority Science and Engineering Improvement $146,689
12.U01 U.s. Department of Defense $131,093
47.049 Mathematical and Physical Sciences $88,674
10.170 Specialty Crop Block Grant Program - Farm Bill $76,382
10.311 Beginning Farmer and Rancher Development Program $61,055
93.959 Block Grants for Prevention and Treatment of Substance Abuse $56,532
81.113 Defense Nuclear Nonproliferation Research $54,538
20.701 University Transportation Centers Program $52,657
84.027 Special Education Grants to States $49,071
81.049 Office of Science Financial Assistance Program $47,785
12.800 Air Force Defense Research Sciences Program $46,236
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $43,339
10.443 Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers $42,480
10.025 Plant and Animal Disease, Pest Control, and Animal Care $42,290
10.523 Centers of Excellence at 1890 Institutions $40,556
10.902 Soil and Water Conservation $39,720
47.083 Integrative Activities $37,847
84.116 Fund for the Improvement of Postsecondary Education $36,109
12.330 Science, Technology, Engineering & Mathematics (stem) Education, Outreach and Workforce Program $34,258
10.960 Technical Agricultural Assistance $32,674
12.598 Centers for Academic Excellence $30,554
93.350 National Center for Advancing Translational Sciences $17,897
10.515 Renewable Resources Extension Act $16,405
10.500 Cooperative Extension Service $16,360
11.431 Climate and Atmospheric Research $12,211
10.328 Food Safety Outreach Program $10,474
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $7,073
15.904 Historic Preservation Fund Grants-in-Aid $3,637
45.129 Promotion of the Humanities Federal/state Partnership $1,750
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $80
84.038 Federal Perkins Loan Program_federal Capital Contributions $0