Finding Text
Federal Agency: US Department of Education
Federal Program Title: Student Financial Assistance Cluster
Assistance Listing Number: 84.007, 84.033, 84.063, 84.268
Federal Award Identification Number: P007A213424 - 2022, P033A123424 - 2022, P063P210352 - 2022, P268K220352 - 2022
Award Period: July 1, 2021 to June 30, 2022
Type of Finding:
• Material Weakness in Internal Control over Compliance; Compliance, Material Noncompliance
Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check. Additionally, per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements.
Condition: The University did not properly notify students when loans were credited to the student's ledger account.
Context: During our Eligibility testing of 60 students, we noted that there were 39 students that received loan disbursements however, all 39 students did not receive the required notification for each loan disbursement.
Questioned costs: N/A
Cause: The University did not send loan disbursement notifications.
Effect: Tailored loan disbursement notifications inform the student or parent of the right to cancel all or a portion of that loan or loan disbursements, and to have the loan proceeds returned to the holder of that loan. The notifications also outline the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan.
Repeat finding: No
Recommendation: We recommend the University evaluate its procedures around disbursements of loans and ensure that notifications of disbursements are sent and contain all the required elements outlined in the FSA handbook.
Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.