Finding Text
Program Information: Federal Pell Grant Program (ALN 84.063) and Federal Direct Student Loan Program (ALN 84.268)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – Common Origination and Disbursement System Reporting: Institutions submit Federal Direct Loan Program, Federal Pell Grant Program, and TEACH Grant origination records and disbursement records to the Common Origination and Disbursement (COD) system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. The U.S. Department of Education (the “ED”) processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner.
Condition: Certain student disbursements were not reported to COD within 15 calendar days as required. Additionally, during an examination of Federal Direct Student Loan disbursement records, instances in which loan proceeds were disbursed prior to having obtained a legally enforceable promissory note were identified.
Cause: Lack of internal controls and administrative oversight.
Effect or Potential Effect: The University is not in compliance with COD reporting requirements. Failure to submit and update COD records in a timely manner could result in improper awards of student funds.
Questioned Costs: None.
Context: We noted the following exceptions:
• For 7 of 60 Federal Pell Grant origination records tested, verification status code was not accurately reported to COD.
• For 11 of 60 Federal Pell Grant origination records tested, enrollment date was not accurately reported to COD.
• For 30 of 60 Federal Pell Grant disbursement records tested, the University did not report the disbursements to COD within the required time frame.
• For 42 of 60 Federal Direct Student Loan disbursement records tested, the University did not report the disbursements to COD within the required time frame.
• For 2 of 25 Federal Direct Student Loan disbursement records tested, the University disbursed loan proceeds without having obtained a legally enforceable promissory note.
Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2020-007 in the prior year schedule of findings and questioned costs.
Recommendation: We recommend the University enhance its procedures and internal controls over disbursement record submissions to ensure timely reporting to COD.
Views of Responsible Officials and Planned Corrective Actions: Primarily the University implemented a robust ERP tool Ellucian Colleague that will assist in the administration and management of Title IV programs. COD processes are run through Colleague's CODE (Common Originators Disbursement Ellucian) system, which is used to send origination requests and disbursement information for Pell and Federal loans to COD. Funds are transmitted to a student's account through a two-part process run between the Financial Aid Office (FAO) and the Business Office. The Finanical Aid Office is responsible for sending loan originations and disbursments to COD within 15 days. The data extraction process will be more consistent using the workflows provided by the new ERP system.