Finding 499149 (2023-001)

Criteria The System is required to disburse Pell and Direct Loan funds to student accounts no earlier than 10 days before the start of the semester. Condition/Context As part of our compliance testing, we note that for 3 selections tested, that the System disbursed funds greater than 10 days before the start of the semester. Cause The System utilizes a third-party student account servicer, and relies on them heavily for the administration of student financial aid. There are not currently sufficient oversight controls in place to ensure that funds are not disbursed earlier than 10 days before the start of the semester. Effect The System did not demonstrate compliance with the disbursement requirement for the accounts tested. Recommendation We recommend that the System establish oversight practices to ensure that compliance is met. Views of Responsible Officials The System will be terminating the contract with the outside third party and bringing administration of the program internal to increase communications and verifications of the start and ending dates of our programs. Monthly meetings will continue to occur with financial aid, finance and the bursar to ensure that timing is within regulations. This will be effective January 1, 2025.