Finding 58408 (2022-003)

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Requirement
N
Questioned Costs
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Year
2022
Accepted
2022-12-14
Audit: 54014
Organization: St. Thomas University Inc. (FL)
Auditor: Bdo USA LLP

AI Summary

  • Core Issue: The University failed to keep original or exact copies of promissory notes for some Perkins loans, violating federal recordkeeping requirements.
  • Impacted Requirements: Non-compliance with Perkins Loan record retention rules, specifically regarding the storage of promissory notes and related documents.
  • Recommended Follow-Up: Ensure all required records are retained and conduct a thorough review of existing records; implement updated procedures for better tracking and storage.

Finding Text

Federal Program Information: Federal Perkins Loan Program (ALN #84.038) Criteria or Specific Requirement: Special Tests and Provisions ? Perkins Loan Recordkeeping and Record Retention - Institutions must retain original or true and exact copies of promissory and master promissory notes (MPN), repayment records, and cancellation and deferment requests for each Perkins loan made, in a locked, fireproof container. (34 CFR 674.19.(e)) Condition: Instances where the University did not retain the original or true and exact copies of promissory notes. Cause: Lack of administrative oversight with respect to recordkeeping and record retention related to the Federal Perkins Loan program (?Perkins?), including improper tracking and storage of records. Effect or Potential Effect: The University was not in compliance with the Perkins loan recordkeeping and record retention requirements. Questioned Costs: None. Context: For 4 of 25 borrowers with open loans selected for testing, the University did not retain an original or true and exact copy of the promissory note. For 3 of 25 borrowers with retired loans within the previous three fiscal years and current fiscal year, the University did not retain the appropriate records. Identification as a Repeat Finding: There was no similar finding in the prior year. Recommendation: We recommend the University retain the appropriate records for the required timeframe. We also recommend a full review of records on-hand. Views of Responsible Officials: The Policy and Procedures manual has been updated to reflect this process. The Business Office has implemented measures to ensure that Perkins Promissory Notes are identified, stored, and accessible during their repayment and collection period. In addition to the current filing system, the Business Office will utilize management software for ease of access and recording. To ensure that all remaining promissory notes are kept in accordance with Department of Education regulations, the Business Office will: ? Record all incoming promissory notes internally and externally. ? Promissory notes created prior to 2013 will be made digitally accessible through Perceptive Content, a secure content management system. Access to these promissory notes will only be accessible by parties with authorized access. ? Promissory notes created after 2013 will continue to be made available through Heartland ECSI?s third party filing system. ECSI records paid, completed, cancelled, and retired promissory notes that were created after 2013. ? In accordance with the Perkins Assignment and Liquidation Guide from the Department of Education (EA ID: General-21-53), all accounts with promissory notes unable to be located will be written off and/or purchased from the Department of Education prior to the end of FY 2023.

Corrective Action Plan

Name of Responsible Officials: Carlos Chaves, Business Office Manager. The Business Office has implemented measures to ensure that Perkins Promissory Notes are identified, stored, and accessible during their repayment and collection period. In addition to the current filing system, the Business Office will utilize management software for ease of access and recording. To ensure that all remaining promissory notes are kept in accordance with Department of Education regulations, the Business Office will: ? Record all incoming promissory notes internally and externally. ? Promissory notes created prior to 2013 will be made digitally accessible through Perceptive Content, a secure content management system. Access to these promissory notes will only be accessible by parties with authorized access. ? Promissory notes created after 2013 will continue to be made available through Heartland ECSI?s third party filing system. ECSI records paid, completed, cancelled, and retired promissory notes that were created after 2013. ? In accordance with the Perkins Assignment and Liquidation Guide from the Department of Education (EA ID: General-21-53), all accounts with promissory notes unable to be located will be written off and/or purchased from the Department of Education prior to the end of FY 2023. The Policy and Procedures manual has been updated to reflect this process.

Categories

Special Tests & Provisions Procurement, Suspension & Debarment Student Financial Aid Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $58.08M
84.063 Federal Pell Grant Program $5.25M
84.038 Federal Perkins Loan Program $1.87M
84.425 Higher Education Emergency Relief Fund - Student Portion $1.10M
93.566 Refugee and Entrant Assistance - Discretionary Grants/ State Administered Programs $718,694
84.033 Federal Work-Study Program $654,194
84.425 Higher Education Emergency Relief Fund - Institutional Portion $246,101
84.120 Minority Science & Engineering Improvement Program $168,528
84.007 Federal Supplemental Educational Opportunity Grants $149,708
84.031 Stem Space $71,666
93.264 Nurse Faculty Loan Program (nflp) $17,250
10.223 Hispanic Serving Institutions Education Grants $8,718