Finding Text
Non-Compliance with Servicer to Deliver Title IV Credit Balances Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Special Tests). Program. Student Financial Assistance Cluster; U.S. Department of Education and U.S. Department of Health and Human Services; Assistance Listing Numbers 84.007, 84.033, 84.038, 84.063, 84.379, 84.268 and 93.364; Award Numbers P007A242029, P033A242029, P038A172029, P063A232029, P063P240235, P379T240235, P268K240235 and P268K250235. Criteria. Under 34 CFR §668.164(e), institutions that enter into Tier Two Arrangements must maintain a written agreement with the financial institution, disclose the agreement publicly on the institution's website, conduct and document a free biennial review, report the arrangement to Federal Student Aid, and implement internal controls to ensure compliance. Condition. The University does not have a formal Banking Services Agreement with its financial institution. In addition, the University has not posted the agreement online, lacks documentation of the required biennial review, has not reported the arrangement to Federal Student Aid, and does not maintain adequate internal controls over the Tier Two Arrangement. Cause. The University has not developed or implemented formal compliance procedures for Tier Two Arrangement requirements. Effect. Failure to comply with federal regulations increases the risk of regulatory sanctions, reputational harm, and potential financial penalties. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend the University execute a formal Banking Services Agreement with the financial institution, publish the agreement on its website, document and perform biennial reviews, report the arrangement to Federal Student Aid, and implement appropriate internal controls to ensure ongoing compliance. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.