Finding Text
Federal Agency Name: U.S. Department of Education Program Name: Student Financial Assistance Cluster
ALN: 84.268
Federal Award Number: P268K222288, P268K232288 Award Year: 2022-2023
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions – Notification of Loan Disbursement
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.
UMHB requires students to provide affirmative confirmation of Title IV award amounts. Per 34 CFR 668.165(a), institutions that 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 30 days after, crediting the student's institutional account.
Condition: We tested a sample of 40 students who received Title IV funds during the year.
Of those students, we tested disbursement notification records for the 36 students who received Direct Loans during the year.
We noted errors in two student files. Two students were notified of Spring 2023 Direct Loan disbursements more than 30 days after their student accounts were credited with the disbursements. We did not note any resulting inappropriate credit balances on the student accounts. Upon additional review, the University identified a total of 100 students who received late loan disbursement notifications.
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.
One report of Spring 2023 disbursements incorrectly excluded a set of 100 Spring 2023 transfer students. The error was identified after the 30 day disbursement notification timeframe and prior to the beginning of the Single Audit. The University corrected the system generated report parameters and provided students with notification of the disbursements as soon as possible after the omission was discovered.
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 40 students who received $791,187 in Title IV Aid, out of a population of 2,668 students who received $44,639,514 in Title IV aid. 2 of the students had errors in loan disbursement notification. These two students were included in the 100 Spring 2023 transfer students identified by the client. This group of 100 students received $1,310,535 in aid.
Repeat Finding from
Prior Year: No
Recommendation: We recommend the University perform a review of all automated loan
disbursement report parameters to ensure that reports of loan disbursements properly include all students receiving loan disbursements.
View of Responsible Officials: Management agrees with the finding. See Corrective action plan.