Finding Text
Criteria
According to 34 CFR 690.83(b)
(1) An institution shall report to the Secretary any change for which a student qualifies including any related Payment Data changes by submitting to the Secretary the student’s Payment Data that discloses the basis and result of the change in award for each student. The institution shall submit the student’s Payment Data reporting any to the Secretary by the reporting deadlines published by the Secretary in the Federal Register.
(2) An institution shall submit, in accordance with the deadline dates established by the Secretary, through publication in the Federal Register, other reports and information the Secretary requires and shall comply with the procedures the Secretary finds necessary to ensure that the reports are correct.
According to the Federal Register (Volume 88, Number 120):
An institution must submit Pell Grant, Iraq and Afghanistan Service Grant, Direct Loan, and TEACH Grant disbursement records to COD, no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. In accordance with 34 CFR 668.164(a), title IV, Higher Education Act (“HEA”) program funds are disbursed on the date that the institution:
(a) Credits those funds to a student’s account in the institution’s general ledger or any subledger of the general ledger; or
(b) pays those funds to a student directly.
Title IV, HEA program funds are disbursed even if an institution uses its own funds in advance of receiving program funds from the Department.
Condition
Federal regulations require the College to report to the Federal Government’s Common Origination and Disbursement System (“COD”) disbursements made to students accurately based on date award was credited to student directly. During our testing, we noted 51 students, out of a sample of 60, was not reported accurately to Common Origination System based on disbursement date per College records.
Cause
The College has policies and procedures in place to report the disbursement records to the Department of Education through the COD are recorded accurately, however, in this case the procedures were not completed properly. Cause due to transition and change in processes as the College has contracted service organization to assist in cash management. The College was not aware that there was a +1 day needed to be added to student accounts from check register provided by service organization, causing variance between actual disbursement date and disbursement date per COD.
Effect
The College did not report Pell disbursements to COD accurately based on College records.
Questioned Costs
Not applicable
Perspective
Our sample was not, and was not intended to be, statistically valid. Of the 60 students selected for testing, 51 students, or 85% of our sample, had disbursement information not recorded.
Identification as a Repeat Finding, if applicable
See finding 2023-002 included in the summary schedule of prior year findings.
Recommendation
We recommend that management of the College review, and if necessary, update the policies and procedures to ensure all Direct Loan funds disbursed are reported accurately based on when awards were credited to student account.
View of Responsible Officials
The College agrees with the finding and has implemented the corrective action plan within the management corrective action plan section of this report.