Finding Text
Cash Management – Monthly Reconciliations for Direct Loans
Student Financial Assistance Cluster – AL 84.007, 84.063 and 84.268
US Department of Education
Significant Deficiency and Nonmaterial Noncompliance
Criteria or specific requirements
Per 34 CFR 685.300(b)(5), on a monthly basis, the College must reconcile institutional records with the
Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and
accepted by the Secretary.
Each month, Common Origination and Disbursement (COD) sends the College a School Account
Statement, which is ED’s official record of the College’s cash and disbursement records and identifies the
difference between the net draws from G5 and the actual disbursement information reported to COD by
the College. The College is required to account for any differences by reconciling ED’s records (School
Account Statements) with the College’s financial and business records.
Condition
During our testing, the College was unable to provide evidence of these Direct Loan reconciliations being
performed monthly.
Cause
The College did not have processes and procedures in place to adequately document the monthly Direct
Loan reconciliations.
Effect
The College is not in compliance with the monthly reconciliation requirements described in 34 CFR
685.300 and the OMB Compliance Supplement.
Questioned Costs
None Context
As part of our audit procedures, we requested all 12 monthly reconciliations for the year under audit. The
College was unable to provide evidence of these reconciliations being performed or documented.
Identification as a repeat finding
This is a new finding for fiscal year 2024.
Recommendation
The College should implement a process for timely review and approval of monthly Direct Loan
reconciliations using the statements provided by COD.
View of responsible officials and corrective action plan
Management agrees with the finding. Please see separate Corrective Action Plan for procedures to be
implemented.