Finding 22784 (2022-001)

Cash Management Other Matter DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2021-2022 Financial Aid Award Year Condition: The University initiated 4 Federal Direct Loan (FDL) drawdowns from G5 for amounts greater than what had been disbursed to students. Criteria: 34 CFR 668.166(a) Questioned Costs: $0 Context: Four FDL drawdowns out of 13 tested did not properly tie to student disbursement rosters related to the draw. All four draws were greater than the amounts disbursed to students. Two overdraws occurred in November and January and were not caught during the monthly reconciliations. These were later corrected and returned in February. Two overdraws occurred in February and were corrected within the same month. Cause: The University processed a large number of G5 drawdowns throughout the year and encountered errors when populating the student disbursement reports to determine the drawdown amounts. In addition, the primary employee responsible for completing FDL reconciliations to COD and the student information system went on maternity leave from November through January. The University had another trained employee assist with these reconciliations in the meantime, but the errors were not discovered until the primary employee returned in February. Effect: FDL funds were overdrawn and not returned timely, which resulted in the University earning interest on the overdrawn funds. Three students out of 60 tested had differences in the dates their federal loans were posted to their student accounts compared to when they were reported as disbursed in COD. Identification as repeat finding, if applicable: N/A. Recommendation: We recommend that another knowledgeable employee review reconciliations each month. We also recommend that the University reduce the number of drawdowns processed during the year to monthly drawdowns. Lastly, we recommend that the University review student disbursement reports generated to determine drawdown amounts before making draws from G5. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.