Finding Text
2022-005. FINDING Failure to Notify Students Upon Disbursement of Funds Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.268; 84.379 Program Names: Student Financial Assistance Cluster - Federal Direct Student Loans Teacher Education Assistance for College and Higher Education Grants Program Expenditures: $20,166,174; $26,878 Award Number: P268K221351 Questioned Costs: None The Chicago State University (University) did not notify the students upon disbursement of grant funds and loans. During testing of nine students, who received Teacher Education Assistance for College and Higher Education Grants (TEACH) totaling $21,220, we noted six (67%) students with grant disbursements totaling $16,505 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 25 students, who received Federal Direct Student Loans totaling $447,363, we noted 25 (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. 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 students? ledger account at the University with TEACH Grant funds or Federal Direct Student 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 upon disbursements of TEACH grants and Direct Loans was due to resource constraints. 2022-005. FINDING Failure to Notify Students Upon Disbursement (Continued) Failure to timely notify students upon disbursement of funds resulted in noncompliance with the Code. (Finding Code No. 2022-005) RECOMMENDATION We recommend the University strengthen controls to ensure timely notification is sent to students upon disbursement of grant funds and loans. UNIVERSITY RESPONSE The University agrees with the finding and is developing a corrective action plan for implementation.