Finding 45690 (2022-006)

-
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2023-05-08
Audit: 40629
Auditor: Sikich LLP

AI Summary

  • Core Issue: A student did not receive notification for a post-withdrawal disbursement of Federal Direct Loans, which is a compliance requirement.
  • Impacted Requirements: This finding indicates noncompliance with 34 CFR 668.22 regarding timely notifications for loan disbursements.
  • Recommended Follow-Up: Enhance controls over post-withdrawal disbursements to ensure all students are notified; no payment is needed as the loan was returned.

Finding Text

Criteria: An institution must notify the student of a post-withdrawal disbursement of Federal Direct Loans used to credit the student?s account for outstanding charges (34 CFR 668.22). Condition: One out of eleven (9.1%) students selected for testing, was disbursed a post-withdrawal disbursement without a notification being sent to authorize the loan disbursement. This was a result of the withdrawal for this student being completed late. We consider this finding to be an instance of noncompliance in relation to Special Tests and Provisions. Statistical sampling was not used in making sample selections. See Schedule of Findings and Questioned Costs for chart/table. Questioned Costs: $1,577. Effect: The result of not notifying the student of a post-withdrawal disbursement is the student is unaware of the additional loan amount. Recommendation: We recommend that the College increase controls over post-withdrawal disbursements. No payment is recommended as the loan amount was returned. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.

Corrective Action Plan

Condition: One out of three (33.3%) students selected for testing in the Spring, was disbursed a post-withdrawal disbursement without a notification being sent to authorize the loan disbursement. This was a result of the withdrawal for this student being completed late. We consider this finding to be an instance of noncompliance in relation to Special Tests and Provisions. Statistical sampling was not used in making sample selections. Corrective Action Plan: It is important to note that the entire 2021/2022 award year was processed by 3rd party servicer, Fully Disbursed. The current Financial Aid staff at Blackburn College started in October of 2021 but the processing was conducted by Fully Disbursed as they were under contract with Blackburn College for all 2021-2022 processing and packaging until August 2022 at the completion of the summer semester. The Financial Aid Office has increased controls over post-withdrawals disbursements in several ways: Establishing updated policies and procedures for disbursing funds after a student withdraws. The policy includes guidelines for determining how much aid a student is eligible for based on their withdrawal date and the specific requirements for disbursing funds; Regularly reviewing and analyzing post withdrawal disbursement data to identify any patterns or discrepancies that may indicate fraud or abuse. This includes a review of the financial records and transactions associated with each disbursement, as well as a review of the documentation that supports these transactions; Working closely with other departments within the College, including Registrar?s Office and the Business Office, to ensure that any changes in a student?s enrollment status are properly communicated and documented. By taking these steps, the Financial Aid Office will ensure that post-withdrawal disbursements are made in accordance with federal regulations and institution policies, and that these funds are used only for their intended purposes. Responsible Person for Correction Action Plan: Alexis Brown, Director of Financial Aid Implementation Date for Corrective Action Plan: Fall 2022

Categories

Questioned Costs Special Tests & Provisions Student Financial Aid Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 45687 2022-003
    Significant Deficiency Repeat
  • 45688 2022-004
    Material Weakness Repeat
  • 45689 2022-005
    Material Weakness Repeat
  • 45691 2022-003
    Significant Deficiency Repeat
  • 45692 2022-004
    Material Weakness Repeat
  • 45693 2022-005
    Material Weakness Repeat
  • 45694 2022-006
    -
  • 45695 2022-003
    Significant Deficiency Repeat
  • 45696 2022-004
    Material Weakness Repeat
  • 45697 2022-005
    Material Weakness Repeat
  • 45698 2022-006
    -
  • 45699 2022-003
    Significant Deficiency Repeat
  • 45700 2022-004
    Material Weakness Repeat
  • 45701 2022-005
    Material Weakness Repeat
  • 45702 2022-006
    -
  • 45703 2022-003
    Significant Deficiency Repeat
  • 45704 2022-004
    Material Weakness Repeat
  • 45705 2022-005
    Material Weakness Repeat
  • 45706 2022-006
    -
  • 622129 2022-003
    Significant Deficiency Repeat
  • 622130 2022-004
    Material Weakness Repeat
  • 622131 2022-005
    Material Weakness Repeat
  • 622132 2022-006
    -
  • 622133 2022-003
    Significant Deficiency Repeat
  • 622134 2022-004
    Material Weakness Repeat
  • 622135 2022-005
    Material Weakness Repeat
  • 622136 2022-006
    -
  • 622137 2022-003
    Significant Deficiency Repeat
  • 622138 2022-004
    Material Weakness Repeat
  • 622139 2022-005
    Material Weakness Repeat
  • 622140 2022-006
    -
  • 622141 2022-003
    Significant Deficiency Repeat
  • 622142 2022-004
    Material Weakness Repeat
  • 622143 2022-005
    Material Weakness Repeat
  • 622144 2022-006
    -
  • 622145 2022-003
    Significant Deficiency Repeat
  • 622146 2022-004
    Material Weakness Repeat
  • 622147 2022-005
    Material Weakness Repeat
  • 622148 2022-006
    -

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $2.72M
84.063 Federal Pell Grant Program $1.15M
84.033 Federal Work-Study Program $936,243
84.425 Education Stabilization Fund $105,943
84.038 Perkins Loan Program $75,937
84.007 Federal Supplemental Educational Opportunity Grants $53,686