Finding Text
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Disbursements To or On Behalf of Students - Notification of Disbursement – Prior to making a disbursement, the school must notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made (often referred to as an award letter or college financing plan) (34 CFR 668.165(a)(1)). Condition: Certain students were not notified of the amount and type of Title IV funds they were expected to receive prior to the University disbursing Title IV funds to the student. Cause: Insufficient administrative oversight and internal controls with respect to award notifications. Effect or Potential Effect: The University was not in compliance with award notification requirements. Questioned Costs: None. Context: For 1 of 25 students tested, an award notification was not sent to the student prior to the student receiving their first disbursement of Title IV funds. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and policies and procedures over Title IV award notifications to ensure such notifications are sent to students prior to the University disbursing aid. Views of Responsible Officials: Johnson C. Smith University acknowledges that, for one student tested, an award notification was not issued prior to the initial disbursement of Title IV funds, as required by federal regulations. Although an award notification was subsequently generated, all Title IV aid for this student had already been disbursed prior to issuance of the notification. The University determined that this exception resulted from insufficient internal controls governing the award notification process within PowerFAIDS, including the absence of a reliable audit trail to document the timing and issuance of award notifications relative to disbursement activity. Contributing factors included reliance on manual processes and limited system-enforced sequencing controls, which reduced the University’s ability to consistently verify that required notifications were issued prior to disbursement.