Finding Text
Finding 2022-001: Disbursements to or on Behalf of Students Federal Agency: U.S. Department of Education Federal Program: Federal Direct Student Loans (ALN 84.268) Award Year: July 1, 2021 to June 30, 2022 Criteria or Specific Requirement: The 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; 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. Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than seven days after, crediting the student?s account and must give the student 30 days to cancel all or part of the loan. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition Found: Of the 40 students selected for disbursement notification testing, 13 students who had disbursements of subsidized direct loans, unsubsidized direct loans, and direct PLUS loans did not receive the required disbursement notifications. Cause and Possible Asserted Effect: The University?s system was not properly configured to automatically send the disbursement notifications to a select number of students at its Prescott campus during the fall 2021 semester; as a result, the students were not notified of their loan disbursements. Questioned Costs: None. Whether the Sample Was a Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding Was a Repeat Finding in the Immediately Prior Audit: No similar findings were noted in the prior year audit. Recommendation: We recommend the University strengthen its controls surrounding the disbursement notification process to ensure students are notified of financial aid disbursements, as required. View of Responsible Officials: Financial Aid management will establish a control check to monitor that student disbursement notices are being sent within the required timeframe. The control check is comprised of a report generated directly from the University?s student information system and a manual review of the output to confirm notices are being sent. This review will be completed at the start of the new aid year and monthly thereafter.