Finding Text
Item 2022-003 Exit Counseling (Significant Deficiency) U.S. Department of Education Federal Direct Student Loans (Assistance Listing Number # 84.268) Compliance requirement: Special Tests and Provisions Criteria According to the Federal Register (34 CFR 685.304 (b) (1)), an institution must ensure exit counseling is conducted with each Federal Direct Loans Program borrower and the institution must maintain in the student borrower's file documents substantiating compliance with these requirements (34 CFR 685.304 (b)(7)). Condition We noted 16 instances where the Institute failed to document exit counseling which should have been conducted with a participating student during the award year. Cause These findings appear to be due to a deficiency in internal controls. Effect or Potential Effect: The institute was not in compliance with federal regulations regarding special tests and provisions for the year ended September 30, 2022. Questioned Costs - None Context Of the 28 participating students subject to exit counseling included in the 40 randomly selected sample of participating students, exit counseling was not documented for 16 participating students. Identification as a repeat finding - No Recommendation We recommend the Institute continue its efforts to ensure all required exit counseling procedures are conducted and documented in compliance with U.S. Department of Education regulations. Views of Responsible Officials and Planned Corrective Actions We agree with both the finding and the recommendation. The instances of missed exit conferences with borrowers under the Federal Direct Loan Program were primarily related to students who had been dropped due to non-payment of tuition and who did not respond to our attempts to contact them for an exit conference. We understand that we failed to properly document our efforts to contact these students to schedule and perform an exit conference. We have amended our procedures to document our efforts to contact any students for which an exit conference is required and we have not been able to schedule one.