Finding 50138 (2022-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 43391
Organization: Wheaton College (MA)
Auditor: Rsm US LLP

AI Summary

  • Core Issue: Two out of 25 student files lacked original loan documents, violating recordkeeping requirements.
  • Impacted Requirements: Institutions must retain original promissory notes and repayment schedules until loans are satisfied, as per federal regulations.
  • Recommended Follow-Up: The College should continue searching for the missing documents; if not found, remove the affected loans from its Perkins portfolio.

Finding Text

Finding No. 2022-002 Federal Perkins Loans Recordkeeping and Record Retention Federal Agency: Department of Education Program: Federal Perkins Loan Program: ALN:84.038 Criteria: Per 34 CFR 674.19?, an institution shall keep the original promissory notes and repayment schedules until the loans are satisfied. If required to release original documents in order to enforce the loan, the institution must retain certified true copies of those documents. Condition: Based on inspection of 25 student files, it was noted that there were two files that did not contain original loan documents. Questioned Costs: None. Prevalence: Out of 25 student files tested, two did not contain original loan documents. The sample was not intended to be, and was not, a statistically valid sample. Effect: The institution may not be able to assign the loan to the government or enforce the loan without original promissory notes. Cause: The College has been participating in for many years, and as such, original records on loans disbursed for students were lost/misplaced since origination due to physical location changes as well as staff changes. In addition, older loans were disbursed with multiple promissory notes, whereas regulations changes from 2003 onwards enforced the use of Master Promissory Notes, which lessened the volume of loan documentation to be retained. Recommendation: We recommend the College continue to search for the missing promissory notes and if unsuccessful remove the loans from its Perkins portfolio as the Government portion will not be able to be turned over to the DOE. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding, and corrective measures have been made.

Corrective Action Plan

2022-002 Federal Perkins Loans Recordkeeping and Record Retention Finding: Based on inspection of 25 student files, it was noted that there were 2 files that did not contain original loan documents. Corrective Action Taken or Planned: The identified loans without corresponding loan documentation originated nearly twenty years ago. At this point in time much of activity in the Office of Student Financial Services was conducted via paper, which left the loan agreements vulnerable to misplacement during office location and staffing changes. In conjunction with the Controller?s office, the Office of Student Financial Services intends to review the Perkins portfolio to identify any additional missing documents and work to locate originals. In cases where this search is unsuccessful, the College will review and potentially remove these agreements from the Perkins portfolio. In addition, the College has recognized a need for additional staffing for continued monitoring in the Office of Student Financial Services and has hired someone for the position of Director of Financial Aid to support the Senior Director for Student Financial Services. Anticipated Completion Date: September 2023 Person(s) Responsible for Corrective Actions: Carla Minchello - Director of Financial Aid

Categories

Student Financial Aid Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 50139 2022-001
    Significant Deficiency
  • 50140 2022-001
    Significant Deficiency
  • 626580 2022-002
    Significant Deficiency
  • 626581 2022-001
    Significant Deficiency
  • 626582 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $8.42M
84.425 Economic Stabilization Fund $1.75M
84.063 Federal Pell Grant Program $1.68M
84.038 Federal Perkins Loan Program $1.37M
84.033 Federal Work-Study Program $292,549
84.007 Federal Supplemental Educational Opportunity Grants $285,805
16.525 Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault, and Stalking on Campus $77,127
10.164 Wholesale Farmers and Alternative Market Development $23,373
43.001 Science $15,344