Finding Text
Federal Program: Student Financial Assistance Cluster Federal Assistance Listing Number: 84.038 Federal Agency: Department of Education (DOE) Federal Award Numbers: Unknown; Award Year: 2025 Criteria: Per 34 CFR §674.19(e), institutions participating in the Federal Perkins Loan Program are required to maintain loan documentation, including properly executed promissory notes and repayment records, for each loan. Such records must be retained until the loan is satisfied, assigned to the U.S. Department of Education, or otherwise resolved, with certain repayment documentation retained for a minimum period following loan resolution. Condition: During prior year testing of Perkins loan documentation, the following exceptions were identified from a sample of 25 loans: 1. 3 of 25 loans did not have a signed promissory note on file. 2. 24 of 25 loans did not have adequate repayment documentation maintained. Due to the nature of the requirement and the extended document retention period, the conditions noted above continue to represent noncompliance with federal requirements. Cause: Turnover within the financial aid and related administrative departments resulted in a lack of continuity in maintaining Perkins loan documentation. Effect: The absence of promissory notes and repayment documentation increases the risk that the institution cannot support loan balances, enforce repayment in the event of default, or demonstrate compliance with federal program requirements. This may result in potential liability, including required assignment of loans to the U.S. Department of Education. Questioned Costs: None reported Context: The prior year exceptions reflect deficiencies in maintaining required Perkins loan documentation across a significant portion of the population tested. Due to the long-term retention requirements associated with Perkins loans, these deficiencies remain relevant in the current year. Repeat Finding: Yes Recommendations: We recommend that the University evaluate its processes and controls to ensure Perkins loan documentation is maintained according to requirements. Views of Responsible Officials: Management agrees with the finding. See management's corrective action plan.