Finding Text
Federal Agency: U.S. Department of Education
Federal Program Name: Student Financial Assistance Cluster
Assistance Listing Number: 84.038
Federal Award Identification Number and Year: N/A – Revolving Loan Portfolio
Award Period: July 1, 2022 – June 30, 2023
Type of Finding:
Other Matters
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: 34 CFR 674.19 (e)(4)(i) requires an institution shall keep the original paper promissory note or original paper MPN and repayment schedules in a locked, fireproof container. Additionally, Institutions must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Institution is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR 200.303).
Condition: During our testing of the open Perkins Loans, we selected a sample of 21 loans, 6 of the loans tested were paper MPNs electronically copied to Adobe PDF and the paper MPNs were not retained and/or stored in the fireproof container. Certified true copies of MPN’s are only allowed to be retained when the original is required to be released to enforce the loan.
Questioned costs: None
Context: Out of a sample of 21 open loans 6 paper signed MPNs were converted to Adobe PDF’s and the original paper MPN was not retained and/or stored in the fireproof container.
Cause: The school was unaware they needed to retain the original copies.
Effect: The school does not have original paper MPNs in a locked, fireproof container.
Repeat Finding: No
Recommendation: We recommend that they assign the loans back to the Department of Education or have the students resign the loans via Electronic MPN or Paper MPN and retain those in the proper manner.
Views of responsible officials: The University agrees with the finding. Management has developed a plan to correct the finding.