Finding 616597 (2022-003)

Significant Deficiency Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-07-12
Audit: 53516
Organization: Virginia Union University (VA)
Auditor: Brown Edwards

AI Summary

  • Core Issue: The University failed to provide proper exit counseling for all Direct Loan borrowers who withdrew, violating federal regulations.
  • Impacted Requirements: Regulations mandate exit counseling must occur within 30 days of withdrawal; documentation of compliance is lacking.
  • Recommended Follow-up: The Financial Aid Director should enhance controls, mail exit counseling materials to students, and retain dated copies in student files for compliance evidence.

Finding Text

Criteria: Regulations require the Institution ensure exit counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan borrower and graduate borrower shortly before the student borrower ceases at least half-time study. Exit counseling must be conducted within 30 days after the school learns the student borrower has withdrawn from school or failed to complete the exit counseling [34 CFR 685.304(b), (1) & 34 CFR 674.42(b)]. Condition: For two of two (all) student files examined where students with direct loans withdrew during FY2022, we did not find satisfactory documentation to show that the University complied with exit counseling requirements. Cause: Weak process and controls over ensuring exit counseling was noted, as well as a lack of recordkeeping to evidence exit counseling requirements were met by the University when a student fails to complete exit counseling online. Effect: For students with a break in enrollment, the University did not meet its responsibilities to provide these individuals with required exit counseling information. Questioned costs: $-0-. Perspective information: The population was the return of Title IV funds - students with Title IV assistance who officially withdrew and received all failing and/or incomplete grades. The total population (in students) was 57. A sample size of 5. The number in sample size that separated from the University and required exit counseling was 2. The number of exceptions found in the preceding column was 2. Identification of repeat findings: Yes, see FA-2021-003. Recommendation: The Financial Aid Director should review the Department of Education?s requirements of institutions related to exit counseling and implement controls to ensure those requirements are met. We recommend that the Department of Education?s Direct Loan Exit Counseling Guide be mailed to the permanent address on record for students who have separated service along with a letter informing them to read the material and perform exit counseling online as a requirement of their federal loans. The materials sent to the students should be dated and copies retained in the students? files as evidence of the University?s compliance. Views of responsible officials: See Client?s Corrective Action Plan.

Categories

Student Financial Aid Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 40152 2022-004
    Material Weakness
  • 40153 2022-001
    Material Weakness Repeat
  • 40154 2022-002
    Significant Deficiency Repeat
  • 40155 2022-003
    Significant Deficiency Repeat
  • 42658 2022-005
    Material Weakness
  • 42659 2022-006
    Material Weakness
  • 42660 2022-007
    Material Weakness
  • 616594 2022-004
    Material Weakness
  • 616595 2022-001
    Material Weakness Repeat
  • 616596 2022-002
    Significant Deficiency Repeat
  • 619100 2022-005
    Material Weakness
  • 619101 2022-006
    Material Weakness
  • 619102 2022-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $7.62M
84.425 Education Stabilization Fund $4.90M
84.063 Federal Pell Grant Program $3.50M
47.076 Education and Human Resources $451,395
84.007 Federal Supplemental Educational Opportunity Grants $390,500
84.031 Higher Education_institutional Aid $380,517
84.047 Trio_upward Bound $331,351
84.042 Trio_student Support Services $308,503
84.033 Federal Work-Study Program $238,349
84.044 Trio_talent Search $194,307
99.U01 National Institue of General Medical Sciences: Institutional Research and Academic Career Devleopment Awards $26,303