Finding Text
Criteria or specific requirement: An institution may enter into an arrangement with a servicer or a financial institution to make a direct payment of FSA credit balances to students through electronic funds transfer to a bank account designated by a student or parent, to issue a check payment to the student or to use an access device such as a debit, demand, or smart card provided by the servicer or its financial partner. When a school uses such a servicer, a school must disclose conspicuously on its website the contract(s) establishing a Tier One or Tier Two arrangement, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities (34 CFR 668.164(e)(2)(vi) and 668.164(f)(4)(iii)).
Schools with Tier One arrangements or Tier Two arrangements above the threshold must also disclose on their Web site: (a) the total consideration for the year, monetary and non-monetary, paid or received by the parties under the terms of the contract; (b) for any year in which the school's enrolled students open 30 or more financial accounts under the arrangement, (i) the number of students who had financial accounts under the contract at any time during the most recently completed award year, and (ii) the mean and median of the actual costs incurred by those account holders. This disclosure must be updated within 60 days after the end of each award year.
A school must also provide to ED an up-to-date URL for the contract for publication in a centralized database accessible to the public. Unless the school has a Tier Two arrangement under the threshold, the URL must also include the contract data described in the paragraph above (34 CFR 668.164(e)(2)(viii); 668.164(f)(4)(iii)(B); 668.164(f)(4)(v)).
Condition: The College did not maintain the required information on their website and had not disclosed the URL to the Department of Education.
Context: The College did not comply with regulations when using a servicer to make FSA payments to students.
Questioned costs: None.
Cause: The College was not aware of the disclosure requirements.
Effect: The college was not in compliance with Title IV third-party servicer requirements.
Repeat Finding: No.
Recommendation: We recommend the College implement procedures to identify requirements about disclosures when using third-party servicers and to implement such requirements on a timely basis.
Views of responsible officials: Management agrees with the finding.