Finding Text
Eligibility Finding Type: Significant deficiency in Internal Controls over Compliance and Compliance Federal Program and AL number: Student Financial Assistance Program: Federal Direct Student Loans (84.268) Criteria: Per 34 CFR § 668.33, to be eligible for Title IV federal student aid, a student must be a U.S. citizen or eligible noncitizen. Condition and context: AFI disbursed Federal Direct Loans to a student who did not meet U.S. citizenship or eligible noncitizen requirements and was not authorized under federal regulations to receive Title IV assistance. Cause: The internal controls over determining international student eligibility were ineffective. Effect: Federal funds were disbursed to an ineligible student resulting in noncompliance with 34 CFR § 668.33 and questioned costs totaling $145,442. Questioned Costs: $145,442 of which $61,468 was awarded in award year 2023 – 2024 and $83,974 for award year 2024 – 2025. The entire balance was returned to the Department of Education in May 2025. Repeat finding: No Recommendation: We recommend AFI to update its internal controls to verify citizenship and eligibility status prior to disbursement. Views of responsible officials and planned corrective actions: Management concurs with the finding and recommendation. Please see the attached corrective action plan.