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): E. Eligibility – Calculation of Benefits – Student Financial Assistance (SFA) awards must be coordinated among the various programs and with other federal and nonfederal aid (need and non-need based aid) to ensure that total aid is not awarded in excess of the student’s financial need or cost of attendance (34 CFR 668.42, FWS, and FSEOG, 34 CFR 673.5 and 673.6; Direct Loan, 34 CFR 685.301). E. Eligibility – Federal Direct Student Loans (“Direct Loans”) (Assistance Listing 84.268) - Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. For undergraduate students there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans (annual subsidized maximum). Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan Program prior to 2010) are $31,000 for dependent undergraduate students (except for dependent students whose parents are unable to borrow Direct PLUS Loans), not more than $23,000 of which may be subsidized Condition: For a certain student tested, the University awarded aid in excess of the student’s financial need. In addition, for a certain student, the University awarded aid in excess of award limits. Cause: Insufficient administrative oversight and internal controls with respect to Title IV award eligibility. Effect or Potential Effect: The University is not in compliance with aid awarding criteria under the eligibility requirements. Failure award and disburse aid in accordance with the required guidelines could result in improper disbursements of Title IV aid. Questioned Costs: Known questioned costs: $3,663; total questioned costs: indeterminable. Questioned costs of $3,663 were identified as a result of over-awards disbursed to students in the selected sample; however, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 1 of 25 students selected for testing, the University disbursed financial aid in excess of the student’s financial need. • For 1 of 25 students selected for testing, the University disbursed Direct Loans in excess of the established maximums. Identification of Repeat Finding: No similar findings noted in the prior year. Recommendation¬¬: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that Title IV aid is properly calculated, awarded, and disbursed. Views of Responsible Officials: The University concurs with the finding and will provide professional justification for the students identified in the audit testing; however, to strengthen internal controls and prevent potential over awards, the Financial Aid Office will enhance cross departmental communication through routine reconciliation meetings and real time reporting of enrollment, housing, scholarship, and waiver changes, implement a double review process in which an assigned counselor and secondary counselor verify aid packages against COA and financial need before disbursement, and provide annual staff training on need analysis, COA construction, Title IV over award regulations (34 CFR 673.5), and proper use of SIS tools to identify conflicts, ensuring stronger compliance and proactive prevention of award discrepancies.