Finding Text
Criteria or specific requirement: The 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 or the TEACH Grant payments returned to ED; 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, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check (34 CFR 668.165). In addition, per the Uniform Guidance 2 CFR 200.303, non-federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: We tested notifications of loan disbursements and noted only a general notification of disbursements went out stating the date that funds were anticipated to be disbursed to student accounts in general. The required elements of the notification of disbursements were not met by this blanket notification. Questioned Costs: None Context: In our testing, we noted that seven of the seven students tested that receive Loans did not receive a notification of disbursements. Cause: The College did not send award disbursement notifications to students at the time of the loan disbursement. Effect: The College was not in compliance with the requirement to provide notification to a student when their loan disbursement is made. Repeat Finding: No. Recommendation: We recommend the College evaluate its procedures around disbursements of loans and ensure that notifications of disbursements are sent and contain all of the required elements outlined in the FSA Handbook. Views of responsible officials: There is no disagreement with the audit finding.