Finding Text
Finding No. 2022-007?Special Tests ? Perkins Loan Recordkeeping and Record Retention Federal Agency: U.S. Department of Education Program: Federal Perkins Loans: ALN: 84.038 Criteria: Per 34 CFR 674.19(e), an institution shall keep the original promissory notes and repayment schedules until the loans are satisfied. If required to release original documents in order to enforce the loan, the institution must retain certified true copies of those documents. Condition: Based on inspection of 27 student files, it was noted that there were seven files that did not contain original loan documents. Questioned Costs: None. Prevalence: Out of 27 student files tested, seven files did not contain original loan documents. The sample was not intended to be, and was not, a statistically valid sample. Effect: The institution may not be able to assign the loan to the government or enforce the loan without original promissory notes. Cause: The loans date back for several years. There have been several individuals charged with responsibility of administering the program over the years who may have had a lack of proper understanding of applicable requirements. Recommendation: We recommend that the Conservatory review their student files to determine which files do not have original loan documentation to determine total exposure and determine what remediation will be required to ensure compliance with the applicable requirements. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and corrective actions will be made.