Finding Text
Finding 2022-001 Student Financial Assistance Cluster of Programs Cash Management 84.268 Federal Direct Loan Program U.S. Department of Education Criteria: 34 CFR 668.162 (b)(3) The institution must disburse the Title IV funds requested as soon as administratively feasible but no later than three business days following the date the institution received those funds. Condition: A sample of thirty-seven students was selected for student file and account testing. Two students had their direct loan funds applied to their account four business days after they were drawn down from G5. When the drawdowns and disbursements were examined, it was noted that a total of sixteen disbursements for a total of $128,161 were applied to student accounts after four business days. Context: The deficiency was discovered during the audit testing of student files and accounts. Effect: Because the loans were unsubsidized and PLUS loans, the effect of this issue to the students would be in the form of interest accrued prior to the students having access to the funds. However, due to the COVID-19 pandemic, interest accruals on loans had been suspended and, as such, no interest was accrued during this period. Cause: These appeared to be isolated incidents where the balance was drawn a day earlier than other similar disbursement cycles. Recommendation: We recommend that the College update their internal documentation review of Title IV drawdown funds in order to prevent early draws. Views of responsible officials: We concur with this finding. This finding was due to human error. The spreadsheet was copied from the last year, and dates were updated to be the current year. The past year may have had a holiday which caused the G5 funds to be received an additional day before the disbursement date. When updating the dates to the current year, the four-day period was not caught. The form was only reviewed by the Director of Financial Aid. To prevent this error from occurring in the future, three members of the Finance Team will review the disbursement schedule so that there are always multiple personnel reviewing the dates. These three members will include the Director of Financial Aid, and any two of the following: Accounting Manager, Staff Accountant, Registrar, or Business Office and Bookstore Manager.