Finding Text
Federal Program: Student Financial Assistance Cluster Federal Assistance Listing Number: Federal Perkins Loan Program Federal Agency: Department of Education Award Year: 2024 Criteria: Universities participating in the Federal Perkins Loan Program must (1) obtain a properly executed promissory note for each loan made and (2) maintain loan records, including the original promissory note (or an imaged copy meeting regulatory standards) and repayment history/supporting documentation, until the loan is satisfied, assigned to the Department of Education (ED), or otherwise resolved. Condition: From a sample of 25 open Perkins loans selected for testing: • The signed Perkins promissory note was not available for 3 of 25 loans tested. • The original repayment documentation (e.g., repayment schedules, statements/correspondence evidencing conversion to repayment, deferment/forbearance approvals where applicable, and payment history artifacts) was not available for 24 of 25 loans tested. Cause: The University did not have adequate internal controls or monitoring procedures in place to ensure proper maintenance of Perkins documentation. Context: Controls were not in place for the University to properly maintain Perkins documentation. Effect: There is an increased risk that the University cannot enforce the loan in the event of dispute or default and may be unable to support amounts reported and collected, potentially resulting in liability for disallowance or required assignment to ED for affected loans. Questioned Costs: None Repeat Finding: No Recommendations: The University should implement and document an overall quality assurance process including adequate controls to prevent overall noncompliance. Management's Response: Management agrees with the finding. See corrective action plan.