Finding Text
Finding 2022-004: Significant Deficiency - Non-compliance with Reporting Requirements for Disbursements Program: Student Financial Assistance Cluster Assistance Listing Number: 84.268 Federal Agency: U.S. Department of Education Federal Award Identification Number: P268K221186 Federal Award Year: June 30, 2022 Repeat of prior year finding 2021-003 Criteria: Title IV regulations, including the most recent Federal Register Notice, published in June 2021, specifies that a school must submit disbursement records no later than 15 days after making the disbursement or becoming aware of the need to adjust a student's previously reported disbursement. Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the Common Origination and Disbursement (COD) system. The disbursement record reports the actual disbursement date and the amount of the disbursement. The US Department of Education processes origination and/or disbursement records and returns acknowledgments to the institution. At the time an institution makes a disbursement to a student, it must confirm that the student is eligible for the funds being disbursed (34 CFR 668.164(b)(3)). For students and/or parents receiving direct loans for the first time they are required to completed entrance counseling and sign the master promissory note. Condition/Context: For 2 of 25 students selected for testing, the disbursement dates did not agree between the student?s institutional account and the data reported to COD. The students had disbursements that were later refunded. It was noted that the students were disbursed without a valid MPN on file, resulting in students being disbursement that were not eligible at the time of disbursement. The College ultimately obtained the signed valid MPNs and then re-disbursed the funds, as a result the student account original disbursement date and the COD disbursement date differ. The sample was not a statistically valid sample. Cause: The College failed to follow its procedures for ensuring students were eligible prior to disbursing funds. Effect: The College disbursed Title IV funds to students that were not eligible for aid at the time of disbursement. Questioned costs: $29,410 of Federal Direct Plus Loans assistance listing number 84.268. Recommendation: It is recommended that the College update policies and procedures for ensuring students are eligible prior to disbursing funds to ensure compliance with Title IV regulations. Management?s Response: Management acknowledges the finding. To ensure that this problem does not recur for 2022-2023, disbursement rules have been instituted in Colleague that would prevent funds disbursing if a student hasn?t completed an MPN. The frequency of exports from Colleague to COD has been increased. In addition, Direct Loan and Pell rejects are being corrected each week so that if funds are disbursed and a Colleague or COD error is received, the disbursement is corrected and re-exported before the 15-day time limit.