Finding Text
Special Tests and Provisions ? Disbursements to or on Behalf of Students Program Name: Student Financial Assistance Cluster Federal Assistance Listing Numbers: 84.007, 84.033, 84.063, and 84.032 Federal Agency: U.S. Department of Education (ED) Type of Finding: Significant Deficiency and Noncompliance Criteria or Specific Requirements 34 CFR 668.164(i): The earliest an institution may disburse SFA funds (other than FWS) (either by paying the student directly or crediting the student?s account) is 10 days before the first day of classes of the payment period or module for which the disbursement is intended. 34 CFR 668.165 (a)(6)(i)): The institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student?s right, or parent?s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. Institutions that implement an affirmative confirmation process must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student?s account at the institution with Direct Loan. Condition Significant Deficiency - During testing over the disbursement requirements, the following deficiencies were noted: ? 3 of 68 students were disbursed aid greater than 10 days before the first day of classes for the payment period. ? The College failed to provide evidence of loan disbursement notifications for 30 of 40 students. Questioned Costs There are no questioned costs associated with the noncompliance. Context The College contracts with a third-party servicer to perform one or more of the functions associated with disbursing Title IV funds on behalf of the school. Due to turnover of key department employees and termination of the service agreement during the fiscal year, the College did not retain evidence of loan disbursement notifications sent to students who received direct loan assistance. Additionally, the College did not ensure compliance with disbursing Pell assistance within the acceptable payment period for the term it was intended. A nonstatistical sample of 68 students out of 346 students were selected for disbursement testing. Effect The College is not in compliance with the Federal disbursement requirements described in the OMB Compliance Supplement. Cause The College did not comply with Federal disbursement requirements students under the Pell Grant and Direct Loan Programs. Repeat Finding No Recommendation The College should implement a process to review, update, and verify student disbursement requirements. The College should maintain a document retention policy in order to comply with Title IV laws and regulations.