Finding Text
Finding 2022-001 Disbursements to or on Behalf of Students Identification of the Federal Program: Student Financial Assistance Cluster, United States Department of Education. OPE ID Affected: 02244900 Compliance Requirement: Special Tests and Provisions Criteria: The Federal Register (34 CFR 668.165(a)(3)(ii)) requires that the institution must provide notice in writing to students no later than seven days after crediting a Direct Loan, Federal Perkins Loan, or TEACH Grant disbursement to the student's ledger account. Condition: During testing of the disbursement to or on behalf of students process, the auditors noted eighteen participating students, out of a sample size of forty students, who were notified eight days after crediting a Direct Loan to the student's ledger account. Cause: As part of the student disbursement notification process, the Organization has procedures in place for notifying students of Direct Loan disbursements timely and accurately. However, it appears that due to administrative oversight, there were certain disbursement dates in which the notifications were not made timely. The Organization put measures and procedures in place immediately after becoming aware of prior year Finding 2021-001 in October of 2021. Disbursements in the Fall 2021 semester had already occurred at the time the Organization became aware of the issue. Effect: The effect of this condition is noncompliance with U.S. Department of Education regulations. Questioned Costs: N/A Context: Our testing noted the eighteen exceptions identified were isolated to just two disbursement dates, which were both in the Fall 2021 semester. The exceptions appear to be isolated to just these two dates based on sampling procedures performed. The auditor notes that a similar finding was reported as Finding 2021-001 in the prior year. The exceptions noted in the current year audit occurred prior to the audit for the year ended June 30, 2021, being completed. Management has since put a corrective action place. No additional exceptions were identified after the 2021 corrective action plan was put into place. Repeat Finding: Repeat finding of 2021-001. Recommendation: As stated above, management implemented their 2021 corrective action plan to address the findings noted shortly after the Fall 2021 disbursement date. We recommend that management continue to keep the corrective action plan in place. Views of Responsible Officials and Planned Corrective Actions: We concur with this finding and no additional corrective action is needed. Based on the finding, we implemented a new process to ensure email addresses are populated in the financial aid system, PowerFaids, prior to disbursement. In addition, we incorporate a mix of manual reviews of files as well as an exception report that we run immediately after any disbursements to ensure all notifications have been processed. In addition, our new processes aim to notify students the following business day, but will now always ensure notification within the 7 days allowed under the regulations.