Finding 1168529 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-01-08
Audit: 380355
Organization: Michigan School of Psychology (MI)
Auditor: SIKICH CPA LLC

AI Summary

  • Core Issue: One student lacked proof of required exit counseling for Federal Direct Loans, indicating non-compliance.
  • Impacted Requirements: Exit counseling is mandatory for students who withdraw, graduate, or drop, as per federal regulations.
  • Recommended Follow-Up: Enhance controls in the financial aid department to ensure all exit interviews are properly documented.

Finding Text

FINDING 2025-001: MISSING PROOF OF LOAN EXIT COUNSELING FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION PROGRAM NAME: FEDERAL DIRECT LOAN PROGRAM ALN#: 84.268 FEDERAL AWARD YEAR: 2024-2025 Compliance Requirement: N. Special Tests and Provisions - Disbursements Criteria: Each student that receives Federal Direct Loans is required to have entrance counseling before release of the first disbursement and exit counseling when they withdraw, graduate, or drop (34 CFR 685.304). Condition: We tested thirty-seven files, of which all were Federal Direct Loan recipients, and proof of loan exit counseling was missing for one student. We consider this finding to be an instance of non-compliance. Cause: The condition was caused by an oversight in the financial aid department. Effect: The result of not conducting exit counseling is students may be uninformed about the responsibilities and consequences of borrowing funds. Question Costs: $6,761 Statistical sampling was not used when making sample selections. Recommendation: As the Institution has since provided the missing exit counseling to the student, we recommend the Institution improve control over exit interviews. Views of Responsible Officials: The Institution agrees with the Single Audit Finding and a response is included in the Corrective Action Plan.

Corrective Action Plan

Finding 2025-001: Missing Proof of Loan Exit Counseling – the auditor tested thirty-seven files, of which all were Federal Direct Loan recipients, and proof of loan exit counseling was missing for one student. As the Institution has since provided the missing exit counseling to the student, it is recommended the Institution improve control over exit interviews. Comments on Finding and Recommendation(s): It is agreed that MSP originally missed providing Direct Loan exit counseling for the 1 student found in testing. The student did not graduate or withdraw, but simply did not return for a following semester. This was an oversight in existing procedures as we were not actively looking for this population of students previously. Actions Taken or Planned: MSP immediately revised the monthly enrollment reporting process such that the initial report for each semester now includes queries to look for students who were enrolled in the prior semester, but have not returned. They will be sent Direct Loan exit counseling requirement information and an email with a URL link to complete the process at StudentAid.gov. In addition, in cases that the registrar becomes aware that a student will not return, they will share that information with Financial Aid.

Categories

Student Financial Aid Special Tests & Provisions

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $8.48M