Finding Text
FINDING NO. 2022-001: Ineligible Disbursement ? Significant Deficiency in Internal Control and Instance of Non-Compliance Federal Program: Student Financial Assistance Cluster Federal Agency: U. S. Department of Education Award Year: 2021-22 Statement of Condition A dependent student was awarded a Federal Unsubsidized Direct Loan without documentation of a parent loan denial. Criteria Federal Unsubsidized Direct Loans are only available to dependent students when a loan to the student?s parents (PLUS) is denied or the file contains documentation of parents? inability to repay the parent loan. 34 CFR 685.203. Effect Of 76 files tested, 1 dependent student received a Federal Direct Unsubsidized Loan in the amount of $1,979 without appropriate documentation. The student was properly awarded all other aid received as a dependent student. Total questioned costs are $1,979. The Institution?s internal control over the related compliance requirement did not function as designed and was not effective in detecting the non-compliance. Therefore, this finding represents a significant deficiency in internal control. Cause In this isolated instance, the Institution did not follow its procedures in properly making awards to students based on federal dependency status criteria. Recommendation The Institution should closely follow its procedures to ensure that students are appropriately awarded. Institution Comments The Institution does not dispute this finding. The Institution has procedures in place to ensure full compliance as detailed in the Corrective Action Plan.