Finding Text
Criteria Under 34 CFR 685.300(b)(5), on a monthly basis, the Institution must reconcile institutional records with Direct Loan funds received and Direct Loan disbursement records submitted to and accepted by the Secretary of Education. Condition The University did not perform the required monthly Direct Loan reconciliations for Academic Year 2024-2025. Cause The condition occurred because during academic year 2024-2025, the University was in the process of transitioning from its previous ERP system, including financial aid module, to a new system, Ellucian Banner. Under the new system, the reconciliation process was not clearly defined, not formally documented, and not consistently executed during a portion of the academic year, which affected the normal reconciliation process, including the retention of supporting documentation. Effect The condition resulted in inconsistent execution of reconciliation procedures and an inability to demonstrate that the University's Direct Loan records align with federal records, increasing the risk of undetected discrepancies. Consequently, it led to actual noncompliance in the months where reconciliations were not performed, as well as potential noncompliance for months in which no documentation was retained to evidence completion. Questioned Costs None. Recommendation We recommend that the University establish and implement a documented process to ensure all required monthly Direct Loan reconciliations are prepared, reviewed, and that the supporting evidence is retained in accordance with federal requirements. Views of Responsible Officials Refer to Management's unaudited corrective action plan.