FAC Explorer

Finding 1173189 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-02-11
Audit: 386649
Organization: Morehead State University (KY)
Auditor: DEAN DORTON ALLEN FORD PLLC

AI Summary

  • Core Issue: The University failed to notify students about post-withdrawal disbursements of federal loans as required by 34 CFR 668.22.
  • Impacted Requirements: Compliance with federal regulations regarding communication for post-withdrawal disbursements was not met.
  • Recommended Follow-Up: Update internal controls and ensure timely notifications are sent to students or parents before disbursements; monitor compliance regularly.

Finding Text

U.S Department of Education Student Financial Assistance Cluster Federal Direct Student Loans, Assistance Listing 84.268 Criteria: The University must comply with 34 CFR 668.22. Condition: We tested nine official withdrawal samples as part of Return of Title IV Funds testing. Of those nine samples, one student had received a post-withdrawal disbursement of federal subsidized and unsubsidized direct loans. The student did not receive written notification that is required of federal loan post-withdrawal disbursement. Upon further evaluation by the University’s management, there were two additional students who received a post-withdrawal disbursement of federal loans without receiving the required communication. Cause: For the Fall 2024 semester, the University did not have a procedure in place to properly send students or student’s parents the required communication of federal loan post-withdrawal disbursements. Effect: The provisions of 34 CFR 668.22 were not followed and thus the students were not notified of the required communication related to a post-withdrawal disbursement of federal direct loans. Questioned Costs: There were no questioned costs associated with this finding. Recommendation: We recommend that the University update their internal controls related to post-withdrawal disbursements and send required communications prior to making a post-withdrawal disbursement of federal loans. Views of responsible officials and planned corrective actions: We agree with this finding and recommendation. Procedures have been updated to ensure that required written notifications are sent to students or parents in accordance with 34 CFR 668.22 prior to, or in conjunction with, any post-withdrawal disbursement of federal direct loans. Staff have been trained on the revised procedures, and controls are in place to ensure that required communications are sent timely and documented. Management will continue to monitor this process to confirm ongoing compliance.

Corrective Action Plan

Finding: 2025-001 Finding: The provisions of 34 CFR 668.22 were not followed. Students were not notified of the required communication related to a post-withdrawal disbursement of federal direct loans. Criteria: The University must comply with 34 CFR Section 668.22. Condition: We tested nine official withdrawal samples as part of Return of Title IV Funds testing. Of those nine samples, one student had received a post-withdrawal disbursement of federal subsidized and unsubsidized direct loans. The student did not receive written notification that is required of federal loan post-withdrawal disbursement. Upon further evaluation by the University’s management, there were two additional students who received a post-withdrawal disbursement of federal loans without receiving the required communication. Cause: For the Fall 2024 semester, the University did not have a procedure in place to properly send students or student’s parents the required communication of federal loan post-withdrawal disbursements. Effect: The provisions of 34 CFR 668.22 were not followed and thus the students were not notified of the required communication related to a post-withdrawal disbursement of federal direct loans. Questioned Costs: There were no questioned costs associated with this finding. Recommendation: We recommend that the University update their internal controls related to post-withdrawal disbursements and send required communications prior to making a post-withdrawal disbursement of federal loans. Corrective Actions Taken: We agree with this finding and recommendation. Procedures have been updated to ensure that required written notifications are sent to students or parents in accordance with 34 CFR 668.22 prior to, or in conjunction with, any post-withdrawal disbursement of federal direct loans. Staff have been trained on the revised procedures, and controls are in place to ensure that required communications are sent timely and documented. Management will continue to monitor this process to confirm ongoing compliance. Name of Responsible Person: Dr. Heidi Reid, Assistant Vice President of Enrollment Management Completion Date: November 25, 2025

Categories

Student Financial Aid

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $16.51M
84.063 FEDERAL PELL GRANT PROGRAM $14.71M
43.014 CONGRESSIONALLY DIRECTED PROGRAMS $2.79M
84.425 EDUCATION STABILIZATION FUND $1.56M
84.002 ADULT EDUCATION - BASIC GRANTS TO STATES $943,002
84.346 MATTINGLY-CDP REHAB 24/26 $767,105
84.116 FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION $579,550
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $543,037
84.042 TRIO STUDENT SUPPORT SERVICES $429,107
84.044 TRIO TALENT SEARCH $404,130
23.002 APPALACHIAN AREA DEVELOPMENT $402,377
17.259 WIOA YOUTH ACTIVITIES $325,171
84.033 FEDERAL WORK-STUDY PROGRAM $316,341
84.047 TRIO UPWARD BOUND $309,028
94.002 AMERICORPS SENIORS RETIRED AND SENIOR VOLUNTEER PROGRAM (RSVP) 94.002 $217,984
84.066 TRIO EDUCATIONAL OPPORTUNITY CENTERS $122,228
47.083 INTEGRATIVE ACTIVITIES $121,889
84.379 TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS (TEACH GRANTS) $92,420
59.037 SMALL BUSINESS DEVELOPMENT CENTERS $87,018
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $78,046
47.050 GEOSCIENCES $52,392
93.788 OPIOID STR $47,758
10.326 CAPACITY BUILDING FOR NON-LAND GRANT COLLEGES OF AGRICULTURE (NLGCA) $45,350
93.658 FOSTER CARE TITLE IV-E $30,918
93.493 CONGRESSIONAL DIRECTIVES $30,798
93.859 BIOMEDICAL RESEARCH AND RESEARCH TRAINING $28,724
84.325 SPECIAL EDUCATION - PERSONNEL DEVELOPMENT TO IMPROVE SERVICES AND RESULTS FOR CHILDREN WITH DISABILITIES $26,069
93.696 CERTIFIED COMMUNITY BEHAVIORAL HEALTH CLINIC EXPANSION GRANTS $25,816
84.027 SPECIAL EDUCATION GRANTS TO STATES $25,526
12.902 INFORMATION SECURITY GRANTS $23,984
16.585 TREATMENT COURT DISCRETIONARY GRANT PROGRAM $21,392
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $21,079
10.558 CHILD AND ADULT CARE FOOD PROGRAM $19,429
10.001 AGRICULTURAL RESEARCH BASIC AND APPLIED RESEARCH $17,098
94.021 AMERICORPS VOLUNTEER GENERATION FUND 94.021 $16,509
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $14,112
23.011 APPALACHIAN RESEARCH, TECHNICAL ASSISTANCE, AND DEMONSTRATION PROJECTS $7,907
47.070 COMPUTER AND INFORMATION SCIENCE AND ENGINEERING $7,353
93.389 NATIONAL CENTER FOR RESEARCH RESOURCES $6,831
94.006 AMERICORPS STATE AND NATIONAL 94.006 $6,813
23.035 Shannon-HHS-VOALA-Willow 23/24 $6,336
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) $6,000
84.334 GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE PROGRAMS $3,654
93.048 SPECIAL PROGRAMS FOR THE AGING, TITLE IV, AND TITLE II, DISCRETIONARY PROJECTS $3,263
84.001 ACADEMIC FACILITIES RECONSTRUCTION AND RENOVATION FOR REMOVAL OF ARCHITECTURAL BARRIERS $2,817
36.U36 GLOVER-VA-Reporting Fee $1,640
16.812 SECOND CHANCE ACT REENTRY INITIATIVE $1,599
10.170 SPECIALTY CROP BLOCK GRANT PROGRAM - FARM BILL $1,591
66.419 WATER POLLUTION CONTROL STATE, INTERSTATE, AND TRIBAL PROGRAM SUPPORT $1,399
11.550 PUBLIC TELECOMMUNICATIONS FACILITIES PLANNING AND CONSTRUCTION $815
93.778 GRANTS TO STATES FOR MEDICAID $587
43.001 SCIENCE $284
15.808 U.S. GEOLOGICAL SURVEY RESEARCH AND DATA COLLECTION $61
84.346 MATTINGLY-CDP REHAB 20/22 $-1,300