Finding 517769 (2024-004)

2024-004 Significant Deficiency: Disbursement Notifications (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268; U.S. Department of Education, Teacher Education Assistance for College and Higher Education Grants, ALN #84.379) (Repeat Finding: 2023-005) Criteria: In accordance with 34 CFR 668.165(a)(2), when a University credits a student’s account, the University must notify the student or parent of (i) the anticipated date and amount of the disbursement, (ii) the student’s or parent’s rights to cancel all or a portion of that loan or disbursement, and (iii) the procedures and time by which the student or parent must notify the University that he or she wishes to cancel the loan or disbursement. This communication must occur no earlier than 30 days before, and no later than seven days after, crediting the student’s ledger account at the institution if the institution does not obtain affirmative confirmation from the student. Statement of Condition: During the 2024 audit, it was noted that certain students who had received Direct Loan funds and/or TEACH grant funds did not receive disbursement notifications. Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature. Perspective Information: The 2024 audit included a detailed testing of 38 applicable student files, of which this significant deficiency applies to 13, indicating an error rate of 34.2%. Cause and Effect: Due to a system failure during the Spring semester, many students did not receive notification from the University of Direct Loan or TEACH Grant disbursements made to their account. This glitch was not recognized by the responsible parties in a timely manner to manually create and disburse such notification. The purpose of disbursement notifications is to provide information to students and parents regarding their accounts and options they may have concerning Title IV aid. Neglecting to provide the disbursement notifications may result in students or parents making uninformed decisions. Recommendation: The University should ensure system functionality periodically, specifically entering periods in which disbursements are concentrated, such as the beginning of the semester, to prevent lapses in mass. The University should also create a process to verify that disbursement notifications have been distributed as intended, so that any missed notices can be remedied timely. View of Responsible Officials: The University has taken a comprehensive and proactive approach to address this issue through two key initiatives. First, we have instituted a robust audit process designed to ensure the integrity and functionality of the system responsible for documenting sent emails. This process enables us to systematically verify that the system is operating as intended. Second, we have deployed advanced software solutions that serve to mitigate the risk of similar issues arising in the future. These combined measures reflect our commitment to ensuring operational reliability and preventing recurrence.