Finding Text
Finding 2023-003
Federal Agency Name: U.S. Department of Education Program Name: Student Financial Assistance Cluster
ALN: 84.268
Federal Award Number: P268K222290, P268K232290 Award Year: 2022-2023
Type of Finding: Material Weakness in Internal Control over Compliance and Material
Noncompliance
Compliance Requirement: Special Tests and Provisions – Disbursements to or on Behalf of Students Criteria: Per 34 CFR 668.165(a), if an institution credits a student ledger account with
Direct Loan, Federal Perkins Loan, or TEACH Grant program funds, the
institution must notify the student or parent of the anticipated date and amount of the disbursement, the student or parent’s right to cancel all or a portion of the loan, and the procedures by which the institution must be notified if he or she wishes to cancel the loan.
McMurry does not require students to provide affirmative confirmation of Title IV award amounts. Per 34 CFR 668.165(a), institutions that do not obtain affirmative confirmation of the accepted loan amounts must provide the aforementioned disbursement notice in writing no earlier than 30 days before, and no later than 7 days after, crediting the student's institutional account.
Condition: We tested a sample of 60 students who received Title IV funds during the year. Of those students, we tested disbursement notification records for the students who received Direct Loans during the year.
We noted errors in 39 student files. Students were either notified of Fall 2022 and Spring 2023 Direct Loan disbursements more than 7 days after their student accounts were credited with the disbursements, or received no notification of the student loan disbursement.
Cause: Loan disbursement notifications are provided to a list of students following each round of aid disbursements. The list of students who require notification comes from a financial aid software report. Financial aid staff provide notifications based on the generated list.
The University hired a new loan coordinator during the year under audit. The change in staffing resulted in missed and late student loan notifications.
Effect: Certain students may have been temporarily unaware that they had Title IV funds applied to their account and available for their use.
Questioned Costs: None reported.
Context/Sampling: A nonstatistical sample of 60 students who received $686,202 in Title IV Aid, out of a population of 953 students who received $9,993,184 in Title IV aid. 39 of the students had errors in loan disbursement notification. These students received $495,936 in Title IV aid.
Repeat Finding from
Prior Year: No
Recommendation: We recommend the University perform refresher training with all staff assigned to perform loan disbursement notification procedures.
View of Responsible Officials: Management agrees with the finding. See Corrective action plan.