Finding 1181343 (2025-001)

Finding 2025-001: Disbursement Notification - Significant Deficiency Federal Program: Federal Direct Student Loans Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions Assistance Listing Number: 84.268 Federal Award Year: June 30, 2025 Award number: N/A Name of pass-through entity: N/A Criteria: Title IV regulations (34 CFR 668.165) states that institutions must notify students or parents in writing of (1) the date and amount of the disbursement; (2) the student's right, or parent's right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Condition/Context: 25 students in a sample of 25 were not given notifications that met the required criteria. Students were notified of awards throughout the academic year, but notifications did not meet the required criteria above. Additionally, the required information on the timing and procedures for canceling loans was made available to students on the College’s website and financial aid office. The sample was not a statistically valid sample. Cause: The College changed systems in 2024, and the system notification was not properly set up. Effect: The students did not receive the required notifications within the required timeframe. Questioned Costs: There are no questioned costs associated with this finding. Recommendation: The College should correct the software error and create a contingency plan to manually notify students to prevent awarding Title IV funds without proper notification. Views of Responsible Official of the Auditee: The College will correct the system error and implement additional review procedures when there are software updates to ensure the automated notices are being sent to comply with notification requirements.