FAC Explorer

Finding 547880 (2024-003)

-
Requirement
E
Questioned Costs
$1
Year
2024
Accepted
2025-03-31
Audit: 351835
Organization: Blackburn University Dba Blackburn College (IL)
Auditor: Sikich CPA LLC

AI Summary

  • Core Issue: The College improperly disbursed Direct Subsidized loans to 2 out of 40 students, violating eligibility rules.
  • Impacted Requirements: This finding breaches the compliance requirement under 34 CFR 685.203 regarding loan amounts exceeding the student's financial need.
  • Recommended Follow-Up: The College should review and improve its policies to ensure accurate disbursement of Subsidized Direct Loans.

Finding Text

Criteria: 34 CFR 685.203 states, "A student may not receive a Federal Direct Subsidized Loan amount that exceeds the student’s estimated cost of attendance for the period of enrollment less the borrower’s expected family contribution and estimated financial assistance for that period.” Condition: The College did not properly disburse Direct Subsidized loans for 2 out of 40 students (5%). We consider this condition to be an instance of noncompliance to the Eligibility compliance requirement and is not a repeated finding. Statistical sampling was not used in making sample selections. Questioned Costs: $1,500 Cause and Effect: Without proper review of eligibility of financial aid, students may receive an incorrect amount of Title IV aid. Recommendation: We recommend the College evaluate policies and procedures to ensure students receive the proper amount of Subsidized Direct Loans. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.

Corrective Action Plan

Identification and Review • Immediately review and recalculate the subsidized need for the affected students. (Completed) • Identify the sources of aid contributing to the excess amount and whether any adjustments can be made within the same academic year • Adjust the loan amounts as necessary and return any excess funds to the Department of Education. (Completed) • Review packaging procedures to pinpoint the cause of the discrepancy (e.g., late outside scholarships, system errors, or manual adjustments Student Award Adjustments • Reduce or cancel institutional or federal aid (such as loans, Federal Work-Study, or certain grants) in accordance with federal regulations and institutional policies • If the excess aid cannot be adjusted within the same academic year, follow federal guidelines to return any over awarded federal funds through the Common Origination and Disbursement (COD) system • Notify students of any changes to their financial aid package and provide guidance on alternative funding options if needed System Enhancements • Implement system-level edits and warnings in the financial aid software to flag over-awards before disbursement. • Schedule regular audits of loan disbursements to ensure ongoing compliance Policy and Procedure Update • Update the financial aid packaging policy to include stricter controls for verifying subsidized need calculations. • Implement a cross-check system for all financial aid components before loan disbursement • Require timely reporting of external scholarships and third-party payments to prevent adjustments after disbursement Monitoring and Compliance • Conduct training sessions for financial aid staff on loan eligibility calculations. • Conduct periodic reconciliation of student aid packages throughout the academic year to prevent over awards • Provide guidance on using the financial aid management system's tools to avoid over-awards Responsible Person for Correction Action Plan: Alexis Brown, Director of Financial Aid Implementation Date for Corrective Action Plan: 02/25/25

Categories

Questioned Costs Student Financial Aid Matching / Level of Effort / Earmarking Eligibility

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $2.27M
84.063 Federal Pell Grant Program $1.15M
84.033 Federal Work-Study Program $973,426
84.038 Federal Perkins Loan Program $75,937
84.007 Federal Supplemental Educational Opportunity Grants $51,433