Finding 518038 (2024-001)

Finding 2024-001: Eligibility Program: Student Financial Assistance Cluster – Direct Loan Program Assistance Listing Number (ALN): 84.268 Federal Agency: U.S. Department of Education Federal Award Identification Number: P268K246824 Federal Award Year: June 30, 2024 Criteria: Title IV regulations require that students are eligible for Title IV funds at the time of disbursement. For students with any c codes or flags they must be resolved before disbursing Title IV funds. One such flag is that students are not in default on any student loans (34 CFR 668.32(g)). Condition: For 1 out of 7 students tested, the school disbursed a loan to a student that had a Perkins student loan in default and there was no support documenting that the student was not in default at the time of the disbursement. The sample was not a statistically valid sample. Cause: The School noted that they confirmed that the student was not in default at the time of disbursement however, did not retain support and it was noted that the student’s Institutional Student Information Record (ISIR) included a code for the default prior to the current year and again at the time of the audit. Effect: Title IV funds were disbursed to a student that may have been in default. Questioned costs: Federal Direct Loans ALN 84.268 $16,770. Context: Not applicable. Recommendation: The School should review policies and procedures to ensure all c codes or flags are cleared prior to disbursement and retain all documentation supporting their conclusions. Management's Response: The School agrees with the finding. Procedures have been updated to ensure all verification and c-code reviews are conducted prior to disbursing of any Title IV aid. This would include maintaining documentation of clearance that is recent and up-to-date in the student’s permanent online folder.