FAC Explorer

Finding 524777 (2024-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-02-27
Audit: 344161
Organization: Mercyhurst University (PA)
Auditor: Rsm US LLP

AI Summary

  • Core Issue: The University failed to provide signed Master Promissory Notes for 3 out of 4 tested Perkins loans.
  • Impacted Requirements: This violates federal regulations requiring retention of signed notes for at least three years post-loan satisfaction.
  • Recommended Follow-Up: Strengthen procedures for collecting and retaining signed notes, and review all outstanding Perkins loan documentation.

Finding Text

Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.038 Federal Award Number: None Federal Agencies: United States Department of Education Criteria: According to federal regulations 34 CFR 674.19, the University must retain an original or electronically signed Master Promissory Note for at least three years after all loans made under the Master Promissory Note are satisfied. Condition: During testing of Perkins Loan Recordkeeping and Record Retention, we identified that the University could not provide a signed promissory note for three out of four loans selected for testing. Cause: The absence of signed forms may be due to inadequate oversight in the loan documentation process or a lapse in following established procedures for collecting and retaining signed forms. Effect: The lack of signed Perkins Loan forms in the files could result in non-compliance with federal regulations and creates challenges in enforcing loan agreements. Questioned Costs: None Context: During testing of Perkins Loan Recordkeeping and Record Retention we identified that the University could not provide a signed promissory note for three out of four loans selected for testing. Repeat Finding: No Recommendation: It is recommended that the University reviews and strengthens its procedures for collecting and retaining signed promissory notes. This may include a review of all outstanding Perkins loan borrowers and review of related documentation to ensure a Master Promissory Note has been signed and retained. View of responsible individuals: Management agrees with the finding.

Corrective Action Plan

Finding: During testing of Perkins Loan Recordkeeping and Record Retention, the University could not provide a signed promissory note for three out of four loans selected for testing. View of responsible officials and corrective action: Management understands the recommendation and the need to retain the records of former students. While we are certain that required documentation exists or existed at one time, the passage of time and lack of digital backups impaired our ability to produce the documents. Since the loans related to the missing documents are currently in repayment status, we feel that provides assurance that the former students did sign the loan agreement. However, we understand the need to retain all critical forms for our students.

Categories

Student Financial Aid Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 524775 2024-002
    Significant Deficiency
  • 524776 2024-002
    Significant Deficiency
  • 524778 2024-003
    Significant Deficiency
  • 1101217 2024-002
    Significant Deficiency
  • 1101218 2024-002
    Significant Deficiency
  • 1101219 2024-001
    Significant Deficiency
  • 1101220 2024-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $19.97M
95.001 High Intensity Drug Trafficking Areas Program $14.22M
84.063 Federal Pell Grant Program $4.03M
84.287 Twenty-First Century Community Learning Centers $868,361
84.038 Federal Perkins Loan Program_federal Capital Contributions $600,191
84.033 Federal Work-Study Program $290,611
84.007 Federal Supplemental Educational Opportunity Grants $274,034
14.267 Continuum of Care Program $50,089
47.076 Stem Education (formerly Education and Human Resources) $33,496
16.817 Byrne Criminal Justice Innovation Program $21,260
17.245 Trade Adjustment Assistance $20,002
93.925 Scholarships for Health Professions Students From Disadvantaged Backgrounds $5,435
12.620 Troops to Teachers Grant Program $1,072
23.002 Appalachian Area Development $662