Finding 504850 (2024-003)

Significant Deficiency
Requirement
E
Questioned Costs
-
Year
2024
Accepted
2024-11-07
Audit: 327576
Organization: Art Academy of Cincinnati (OH)

AI Summary

  • Core Issue: Two students were not awarded their maximum Direct Subsidized Loan amounts due to software errors.
  • Impacted Requirements: Institutions must determine maximum subsidized loan eligibility before issuing unsubsidized loans, as per federal guidelines.
  • Recommended Follow-Up: Review and improve controls in the Campus Café software to ensure students receive the best loan options first.

Finding Text

Finding 2024-003: Eligibility Federal Program: Federal Direct Student Loans [84.268] Criteria: Per the 2023-2024 Federal Student Aid Handbook, chapter 3 Packaging Aid, an institution must determine an undergraduate student’s maximum Direct Subsidized Loan eligibility before originating a Direct Unsubsidized Loan for the student. Condition: During testing of eligibility, 2 out of 40 students were not awarded their maximum subsidized loan amounts they should have been awarded. Cause: The Campus Café software was awarding incorrect Direct Loan amounts to students when batching ISIR reports. Effect: The students did not receive the most advantageous loan options first. Questioned Costs: No questioned costs. Context: This is a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Academy review their controls to ensure students are receiving the most advantageous loan options first as part of the packaging process.

Corrective Action Plan

The Financial Aid (FA) department is taking additional steps to determine the amount of Federal Direct Loans a student is eligible to receive based on their academic classification, ensuring the loan amounts align with the annual limits set forth by the U.S. Department of Education, which are contingent on the student's academic progress and dependency status. Monitoring will take place by FA to review student loans prior to disbursement to ensure awards are following Department of Education guidelines. Completion date: This process has been implemented with the start of the Fall 2024 semester.

Categories

Student Financial Aid Eligibility Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 504849 2024-002
    Significant Deficiency
  • 504851 2024-002
    Significant Deficiency
  • 1081291 2024-002
    Significant Deficiency
  • 1081292 2024-003
    Significant Deficiency
  • 1081293 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $2.18M
84.063 Federal Pell Grant Program $711,999
21.027 Coronavirus State and Local Fiscal Recovery Funds $38,272
84.033 Federal Work-Study Program $31,638
84.007 Federal Supplemental Educational Opportunity Grants $22,688