Finding Text
2023-005. FINDING Failure to Notify Students and Parents Upon Disbursement of Funds
Federal Agency: U.S. Department of Education
Assistance Listing Numbers: 84.379; 84.268
Program Names: Student Financial Assistance Cluster -
Teacher Education Assistance for College and Higher Education Grants
Federal Direct Student Loans
Program Expenditures: $25,460; $20,224,493
Award Number: P379T221351; P268K221351
Questioned Costs: None
The Chicago State University (University) did not notify the students and parents upon disbursement of grant funds and loans.
During testing of five students, who received Teacher Education Assistance for College and Higher Education Grants (TEACH) totaling $14,145, we noted five (100%) students were not notified by the University indicating the funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid.
In addition, during testing of 40 students, who received Federal Direct Loans totaling $700,656, we noted 38 (95%) students with grant disbursements totaling $695,212 were not notified by the University indicating the funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid.
The Code of Federal Regulations (Code) (34 CFR § 668.165 (a)(3)(i)) requires the University to notify students or parents in writing no earlier than 30 days before, and no later than 30 days after, crediting the student’s ledger account at the University with TEACH Grant funds and Federal Direct Loans.
Further, the Code (2 CFR § 200.303) requires the nonfederal entity receiving federal awards to establish and maintain effective internal control over the federal award to provide reasonable assurance the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure timely notification of disbursements to students receiving TEACH Grants and Federal Direct Loans.
University management indicated the failure to timely notify students and parents upon disbursements of TEACH Grants and Direct Loans was due to resource constraints.
Failure to timely notify students and parents regarding grant and loan disbursements is a noncompliance with the Code. (Finding Code No. 2023-005, 2022-005)
RECOMMENDATION
We recommend the University strengthen controls to ensure timely notification is sent to students and parents upon disbursement of grant funds and loans.
UNIVERSITY RESPONSE
The University agrees with the recommendation. Upon discovery, the corrective action was immediately implemented so that by the end of Fisal Year 2023, the University was in compliance with the requirements.