Finding 34449 (2022-005)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-06-28

AI Summary

  • Core Issue: The Institute failed to notify students about Federal Direct Loan proceeds credited to their accounts within the required timeframes.
  • Impacted Requirements: This noncompliance violates U.S. Department of Education regulations (34 CFR 668.165 (a)(3)) regarding timely notifications.
  • Recommended Follow-Up: Revise procedures and implement controls to ensure timely notifications are sent to all participating students.

Finding Text

Item 2022-005 Federal Direct Loan Program Student Notification (Significant Deficiency) U.S. Department of Education Federal Direct Student Loans (Assistance Listing Number # 84.268) Compliance requirement: Special Tests and Provisions Criteria According to the Federal Register (34 CFR 668.165 (a)(3)), an institution must provide notice to a participating student no earlier than 30 days before, and no later than seven days after, crediting the student's account with Federal Direct Loan Program proceeds at the institution, if the institution does not receive affirmative confirmation from the student. Condition We noted that the Institute did not send out the required notifications regarding Federal Direct Student Loan Program proceeds that had been credited to participating student's accounts within prescribed timeframes in accordance with U.S. Department of Education regulations. Cause These findings appear to be due to a deficiency in internal controls. Effect or Potential Effect: The effect of these findings is noncompliance with U.S. Department of Education regulations regarding special tests and provisions. Questioned Costs - None Context A total of 37 students who were credited with Federal Direct Loan Program proceeds during the year were included in the randomly selected sample of 40 participating students. Our testing noted that none of the students with Federal Direct Loan Program proceeds credited to their account were provided with the required notifications. Identification as a repeat finding - No Recommendation We recommend the Institute review and revise, its current procedures and have controls in place to ensure required notifications regarding Federal Direct Loan Program proceeds are provided to participating students. Views of Responsible Officials and Planned Corrective Actions We agree with both the finding and the recommendation. A system has been implemented to send out the required notifications regarding Federal Direct Student Loan Program proceeds that have been applied to a participating student?s account.

Corrective Action Plan

Recommendation: The auditors recommended that the Institute review and revise its current procedures and have controls in place to ensure required notifications regarding Federal Direct Loan Program proceeds are provided to participating students. Action Plan: We agree with both the finding and the recommendation. A system has been implemented to send out the required notifications regarding Federal Direct Student Loan Program proceeds that have been applied to a participating student?s ac-count.

Categories

Special Tests & Provisions Student Financial Aid Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 34447 2022-003
    Significant Deficiency
  • 34448 2022-004
    Significant Deficiency
  • 34450 2022-001
    Material Weakness
  • 34451 2022-002
    Significant Deficiency
  • 34452 2022-001
    Material Weakness
  • 34453 2022-002
    Significant Deficiency
  • 610889 2022-003
    Significant Deficiency
  • 610890 2022-004
    Significant Deficiency
  • 610891 2022-005
    Significant Deficiency
  • 610892 2022-001
    Material Weakness
  • 610893 2022-002
    Significant Deficiency
  • 610894 2022-001
    Material Weakness
  • 610895 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $2.22M
84.063 Federal Pell Grant Program $877,021
84.425 Education Stabilization Fund $301,211