Finding Text
Federal Agency: U.S. Department of Education
Federal Program Title: Student Financial Assistance Cluster
Assistance Listing Number: 84.268 – Federal Direct Loans
Federal Award Identification Number and Year: P268K220355 - 2023
Award Period: July 1, 2022 to June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance; Compliance, Other Matter
Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.203 specifies the annual and aggregate loan limits the Institutions may not exceed for an academic year of study under the Direct Loan program and also requires loans to be prorated for a program of student that is less than a full academic year in length. In addition, per the Uniform Guidance 2 CRF 200.303, non-federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonable ensure compliance with federal laws, regulations, and program compliance requirements.
Condition: The College over paid federal direct loans.
Questioned Costs: None
Context: During our eligibility testing of 40 students, we noted one student had a subsidized loan over payment due to reaching their subsidized aggregate loan limit.
Cause: When doing the award packaging for this student, the College did not adjust award amounts based on the student’s subsidized aggregate loan limit activity.
Effect: The institution paid this student an amount of subsidized loans that was above the subsidized aggregate loan limit.
Repeat Finding: No.
Recommendation: We recommend that the College review their awarding procedures and implement procedures to ensure direct loans are paid within the aggregate limits.
Views of responsible officials: There is no disagreement with the audit finding.