Finding Text
Finding 2024-001: Significant Deficiency – Noncompliance with Special Tests and Provisions: Disbursements
Federal Program - Student Financial Assistance Cluster
Federal Agency - U.S. Department of Education
Pass-Through Entity - Not Applicable
Assistance Listing Number - 84.268
Federal Award Number - P268K255904
Federal Award Year - December 31, 2024
Criteria: Title IV regulations (34 CFR 685.301(b)(6)) require that the date of loan origination is the date a school creates the electronic loan origination record. Title IV regulations specifies that a school must submit disbursement records no later than 15 days after making the disbursement or becoming aware of the need to adjust a student's previously reported disbursement. Institutions submit Direct Loan origination records and disbursement records to the Common Origination and Disbursement (COD) system. The disbursement record reports the actual disbursement date and the amount of the disbursement. The US Department of Education processes origination and/or disbursement records and returns acknowledgments to the institution.
Condition: For 3 of 25 students selected for testing, the disbursement dates did not agree between the student's institutional account and the data reported to COD. Each student had disbursements that were later partially or fully refunded. The sample was not a statistically valid sample.
Cause: The Foundation failed to follow its procedures for reporting student disbursement dates correctly and/or within the required timeframe.
Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the disbursement information reported by institutions. If an institution does not review, update, and verify disbursement dates, then the Title IV student loan records will be inaccurate.
Questioned costs: $30,426 of Federal Direct Unsubsidized Loans.
Recommendation: It is recommended that policies, procedures and effective controls are put in place to verify that the disbursement dates for federal funds are matching between the student account detail and the COD system.
Management Response: The Foundation will ensure that policies, procedures and effective controls are in place to verify the matching of the disbursement dates for federal funds between the student account detail and the COD system.