Finding Text
Finding 2025‐003 – Special Tests and Provisions – Disbursements to or on Behalf of Students Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal program: Student Financial Assistance Cluster: Federal Pell Grant Program (Pell), ALN 84.063 Federal Direct Student Loans, Assistance Listing No. 84.268 Award years: 2024‐2025 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The University was unable to provide evidence that internal controls were performed in relation to notifications of disbursements, including notification of the amount and type of Title IV funds students are expected to receive, and how and when those disbursements will be made (award letter), and when direct loans are being credited to a student’s account (direct loan notification). Cause: The evidence of the internal control over award letters being sent to students consisted of award letter job completion confirmation emails. The evidence of the internal control over direct loan notifications includes reports of direct loan disbursements and corresponding dates of direct loan notifications received through the reporting tool, Argos, through email. The University indicated an issue with Outlook caused the emails to be deleted, so we were unable to observe some of the emails related to the award letters and any of the emails related to the direct loan notifications for the fiscal year ended May 31, 2025. Effect or potential effect: Evidence of the performance of internal controls over award letters and direct loan notifications did not exist. Award letters may not be sent, resulting in noncompliance, and direct loan notifications may not be made timely which could impact the student’s ability to cancel the loan. Questioned costs: $0 Context: Once the University prepares award packages for students, the award letter chain is triggered. Once the award letter chain is triggered, an award letter job completion confirmation is received via email by the Office of Financial Aid. We observed award letter job completion confirmation emails for 3 of 9 weeks selected for testing; however, we did not observe award letter job completion confirmation emails for the remaining 6 of 9 weeks selected. The University indicated there was a storage issue with Outlook causing emails to be deleted, including those related to award letter job completion emails. Due to the Outlook storage issue, we were unable to verify which weeks did or did not require award letters to be sent to students or which weeks might have been affected by the storage issue. Although, we did not observe the award letter job completion confirmation emails for 6 selected weeks, we did observe award letters were sent to each of the students selected in our disbursement testing, noting no compliance exceptions. The University receives emails from its reporting tool, Argos, of direct loan disbursements made and corresponding direct loan notification dates. We were unable to obtain the Argos emails containing the direct loan notification reports for 25 selected days. As a result, we could not confirm whether the University received the reports or performed the control to determine if any manual notifications should have been made. According to the University, the storage issue with Outlook caused Loan Disbursement Notification Quality Control emails to be deleted. We observed no such emails dated during the fiscal year ended May 31, 2025. Although we did not observe the email documentation and reports from Argos as evidence that internal controls over direct loan notifications were performed, we did observe direct loan notifications were made for the disbursements to students selected in our disbursement testing, noting no compliance exceptions. Total Student Financial Assistance Cluster expenditures for the year ended May 31, 2025, were $138,008,610, of which $14,477,268 were for Pell and $118,404,580 were for Direct Loans. Identification as a repeat finding, if applicable: Not applicable. Recommendation: The University should ensure that evidence of the performance of internal controls related to award letters and direct loan notifications is maintained. Views of responsible officials: Management agrees with the finding and has developed a corrective action plan whereby the Office of Financial Assistance is now able to retain evidence of emails related to internal controls over award letters and direct loan notifications. The corrective action was implemented by May 23, 2025.