Finding 1154798 (2024-003)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-09-23
Audit: 367160
Organization: Samuel Merritt University (CA)

AI Summary

  • Core Issue: The University failed to keep proper documentation for exit interviews, missing signed Truth in Lending Statements for 5 out of 7 students.
  • Impacted Requirements: Regulations require schools to conduct and document exit interviews, including mailing information if borrowers do not attend.
  • Recommended Follow-Up: Update policies and procedures for exit interviews and ensure all necessary documentation is maintained, as per regulatory requirements.

Finding Text

2024-003 – NSL Exit Interview Documentation Assistance Listing Number: 93.364 Nursing Student Loan program Criteria According to 42 CFR Part 57 § 57.310 (b), the regulations require a school to conduct and document an exit interview with its borrowers. If a borrower fails to appear for an exit interview, the school must attempt to conduct the exit interview by mailing the exit interview information to the borrower. If the borrower fails to return the information, the school must maintain in the borrower’s file a copy of the repayment terms sent to the borrower and the date the exit interview information was mailed as documentation of the contact. Condition/Context The University did not properly maintain documentation of exit interviews and did not have signed Truth in Lending Statements on file for 5 of the 7 students selected for testing. Effect Documentation was not maintained and as such students may not have received appropriate repayment and other information related to their loans outstanding. Questioned Costs There were no questioned costs related to this finding. Recommendation The University should update policies, procedures, and guidelines around handling of exit interviews and related documentation if a student does not appear in person for the interview. Regulations should be reviewed to create a list of the necessary documents to be maintained by the school. Responsible Personnel Tony Baraghimian Deputy CFO & Controller

Corrective Action Plan

Planned Corrective Action The University recognizes the deficiencies in maintaining proper documentation related to exit interviews for the Nursing Student Loan program. In response, the University is updating its policies and procedures to ensure full compliance with 42 CFR Part 57 § 57.310 (b), including: -Requiring signed Truth in Lending Statements for all borrowers -Maintaining evidence of mailings in cases where borrowers fail to attend in-person exit interviews or failed to return the mailing -Implementing a checklist and file audit process to ensure all required documentation is consistently retained Staff involved in loan processing and management will be retrained to ensure awareness of the regulatory documentation requirements. Implementation Date -Policy & Procedure Update: December 31, 2025 -Staff Training Completion: October 31, 2025 Responsible Personnel Tony Baraghimian Deputy CFO & Controller

Categories

Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1154796 2024-001
    Material Weakness Repeat
  • 1154797 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $71.23M
93.364 Nursing Student Loans - Outstanding As of January 1, 2024 $3.25M
93.342 Health Professions Student Loans, Including Primary Care Loans/loans for Disadvantaged Students - Outstanding As of January 1, 2024 $1.72M
93.364 Nursing Student Loans - Issued During the Year $1.13M
93.178 Nursing Workforce Diversity $722,110
93.732 Mental and Behavioral Health Education and Training Grants $639,022
84.063 Federal Pell Grant Program $611,393
84.033 Federal Work-Study Program $491,088
84.007 Federal Supplemental Educational Opportunity Grants $160,109
93.342 Health Professions Student Loans, Including Primary Care Loans/loans for Disadvantaged Students - Issued During the Year $147,021
84.116 Fund for the Improvement of Postsecondary Education $75,246
84.038 Federal Perkins Loan Program - Outstanding As of January 1, 2024 $70,132
16.582 Crime Victim Assistance/discretionary Grants $49,507