Finding Text
Cash Management
Student Financial Assistance Cluster of Programs
84.268 Federal Direct Loan Program
U.S. Department of Education
Criteria: 34 CFR 668.162 (b)(3) The institution must disburse the Title IV funds requested as soon as administratively feasible but no later than three business days following the date the institution received those funds.
Condition: A sample of thirty-seven students was selected for student file and account testing. Two students had their direct loan funds applied to their account four business days after they were drawn down from G5. When the drawdowns and disbursements were examined, it was noted that a total of sixteen disbursements for a total of $128,161 were applied to student accounts after four business days. This is a repeat of prior year Finding 2022-001.
Context: This was discovered during the audit testing of student files and accounts.
Effect: Because the loans were unsubsidized and PLUS loans, the effect of this issue to the students would be in the form of interest accrued prior to the students having access to the funds. However, due to the COVID-19 pandemic, interest accruals on loans had been suspended and, as such, no interest was accrued during this period.
Cause: The late disbursements happened on the same day and appear to be an isolated incident. These amounts appear to have been drawn a day earlier than the ordinary disbursement timeline.
Recommendation: We recommend the College improve internal documentation review of Title IV drawdowns to ensure timely application of funds to student accounts.
tion 3 - Federal Award Findings and Questioned Costs - Continued
Views of responsible officials: As the finding mentioned, this issue was found in the previous audit and corrective action was taken at that time. The finding was the result of human error where draw down dates were not updated from the prior year. Review of the form was expanded to include three members of the Finance Team. No further insances have occurred since.