Finding 1239323 (2025-003)

Finding 2025-003: Notification of Disbursements to or on Behalf of Students | Identification of the federal program: Federal Agency: United States Department of Education. Federal Cluster: Student Financial Assistance Cluster. Assistance Listing No.: 84.268 Federal Direct Student Loans (Direct Loans) and 84.063 Federal Pell Grant Program. Award Periods: July 1, 2024 through June 30, 2025; July 1, 2025 through June 30, 2026. Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 34 CFR 668.165(a)(1) – Before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Condition: When Direct Loans are being credited to a student’s account, an institution must notify the student, or parent, 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 to the holder of that loan; 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. Atrium Health CMHA was unable to provide the notification letters sent to the student as they are not maintained.. Cause: The current IT system does not allow for the letters sent to be saved. Effect or potential effect: The disbursement notification letters may not have been sent in accordance with the regulations. Questioned costs: None. Context: Total expenditures for the Student Financial Assistance Cluster were $3,348,141 for the year ended December 31, 2025. We selected a sample of 40 disbursements and identified 40 that did not have notification of disbursement. Identification as a repeat finding, if applicable: This finding is a repeat finding of 2024-003 from the prior year. Recommendation: Atrium Health CMHA should implement internal controls to retain all disbursement notification letters sent to students. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.