Finding 2020 (2023-001)

FINDING 2023-001 – Special Tests and Provisions – Borrower Data Transmission and Reconciliation: Significant Deficiency in Internal Control Over Compliance (See Finding 2023-001 for included table): Criteria – 34 CFR 685.300(b)(5) – On a monthly basis, the school must reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary. Condition / Context – The University of San Diego operates a law school and an undergraduate and graduate school. A sample of 6 direct loan reconciliations were selected from the population of all reconciliations performed by the University, under both schools during the year ended June 30, 2023. We obtained the supporting schedules used to reconcile the disbursed direct loan funds to the federal government’s records. The University did not complete reconciliations of its direct loan program disbursements for the law school between December 2022 and June 2023. Cause –There was turnover in the position responsible for reconciling this data, and the responsibility did not transfer to another individual, and as a result, the reconciliations were not completed. Effect – There is a chance that the University of San Diego’s records may not match the federal government’s records of direct loan disbursement. Repeat finding – This is a repeat finding, see 2022-002. Recommendation – We recommend the University revise its existing policies and procedures to ensure when a change in personnel occurs, responsibilities appropriately transfer to a new individual. View of responsible officials – Management concurs with this finding. This exception was due to the monthly reconciliation not being part of the established policies and procedures for the Law School Financial Aid Office. As a result, during staff turnover the interim staff were unaware of the responsibilities and requirements for the monthly reconciliation. Management updated the direct lending servicing system reconciliation procedures for the Law School to clearly delineate the responsible parties. Management believes these enhancements will be sufficient to prevent future errors.