Finding 617937 (2022-001)

Significant Deficiency
Requirement
E
Questioned Costs
$1
Year
2022
Accepted
2022-12-29

AI Summary

  • Core Issue: A dependent student received a Federal Unsubsidized Direct Loan of $1,979 without required documentation of a parent loan denial, indicating a significant internal control deficiency.
  • Impacted Requirements: Federal regulations state that these loans are only available if a parent loan is denied or if there is proof of the parent's inability to repay.
  • Recommended Follow-Up: The Institution should strictly adhere to its procedures for awarding loans to ensure compliance with federal dependency criteria.

Finding Text

FINDING NO. 2022-001: Ineligible Disbursement ? Significant Deficiency in Internal Control and Instance of Non-Compliance Federal Program: Student Financial Assistance Cluster Federal Agency: U. S. Department of Education Award Year: 2021-22 Statement of Condition A dependent student was awarded a Federal Unsubsidized Direct Loan without documentation of a parent loan denial. Criteria Federal Unsubsidized Direct Loans are only available to dependent students when a loan to the student?s parents (PLUS) is denied or the file contains documentation of parents? inability to repay the parent loan. 34 CFR 685.203. Effect Of 76 files tested, 1 dependent student received a Federal Direct Unsubsidized Loan in the amount of $1,979 without appropriate documentation. The student was properly awarded all other aid received as a dependent student. Total questioned costs are $1,979. The Institution?s internal control over the related compliance requirement did not function as designed and was not effective in detecting the non-compliance. Therefore, this finding represents a significant deficiency in internal control. Cause In this isolated instance, the Institution did not follow its procedures in properly making awards to students based on federal dependency status criteria. Recommendation The Institution should closely follow its procedures to ensure that students are appropriately awarded. Institution Comments The Institution does not dispute this finding. The Institution has procedures in place to ensure full compliance as detailed in the Corrective Action Plan.

Categories

Questioned Costs Student Financial Aid Eligibility Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 41495 2022-001
    Significant Deficiency
  • 41496 2022-002
    Significant Deficiency
  • 41497 2022-003
    Significant Deficiency Repeat
  • 617938 2022-002
    Significant Deficiency
  • 617939 2022-003
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $5.45M
84.425 Education Stabilization Fund $2.16M
84.063 Federal Pell Grant Program $1.67M
84.007 Federal Supplemental Educational Opportunity Grants $99,792
84.033 Federal Work-Study Program $84,271