Finding Text
Finding 2024-004: Disbursements to Students - Significant Deficiency
ALN: 84.268 Federal Direct Loan Program
Award Year: July 1, 2023 - June 30, 2024
Federal Agency: U.S. Department of Education
Pass-Through Entity: Not applicable
Criteria: 34 CFR 668.164 requires that institutions must ensure that disbursements reported to the
Common Origination and Disbursement (COD) system accurately reflect the amounts posted to
students' accounts. Regular reconciliation between the COD system and institutional financial records
is required to identify and correct discrepancies, thereby maintaining compliance with federal
regulations. Failure to perform these reconciliations can lead to inaccurate financial reporting and
potential noncompliance with Title IV requirements.
Condition: Of the forty disbursements to students tested, one disbursement tested had a difference
when reconciling the student account statement to the COD system. The sample was not a
statistically valid sample.
Cause: The College had turnover in staffing within the financial aid department causing these
procedures to be missed.
Effect: The potential exists that an error could occur in the financial records and not be detected
within a timely manner resulting in variances between the College's records and the Department of
Education records.
Questioned Costs: $494
Recommendation: The College should perform monthly reconciliations of the College’s financial
records compared to the Direct Loan system records on a timely basis and they should be reviewed
and approved by someone other than the original preparer who would be knowledgeable enough to
identify and correct all errors to ensure compliance with federal regulations.
Management Response: Management concurs with the finding and will reconcile the College’s
disbursement records with the federal COD system and correct all errors on a monthly basis.