Finding Text
Federal Agency: U.S. Department of Education
Program: Student Financial Assistance Cluster – Federal Perkins Loan Program: ALN 84.038
Criteria: In accordance with Department of Education requirements, institutions must retain original or true and exact copies of promissory and master promissory notes (MPN) for each Perkins Program loan made. Institutions are required to keep original paper promissory notes or original paper master promissory notes and repayment schedules in a locked, fireproof container. Such documents must be kept until the loans are satisfied.
Condition: Out of 40 outstanding Perkins loans selected for testing, the College was unable to provide the original promissory note for one loan.
Questioned Costs: None
Effect: Failure to retain or safeguard original documentation could result in missing supporting documentation for outstanding loans.
Cause: Employee turnover in the past was an underlying cause.
Recommendation: We recommend the college evaluate their procedures for maintaining original documentation and ensure there is a control over maintaining prior documentation over time.
Reporting Views of Management and Corrective Actions: Management agrees with the finding and corrective actions were made.