Finding Text
Eligibility Program Name: Student Financial Assistance Cluster Federal Assistance Listing Numbers: 84.007, 84.033, 84.063, and 84.032 Federal Agency: U.S. Department of Education (ED) Type of Finding: Material Weakness in Internal Control and Material Noncompliance Criteria or Specific Requirements 34 CFR section 685.203: In the case of an undergraduate student who has not successfully completed the first year of a program of undergraduate education, the total amount the student may borrow under the Direct Subsidized Loan Program may not exceed $3,500 for a program of study of at least a full academic year in length. 34 CFR section 690.62: The Pell grant for an academic year is based upon the payment and disbursement schedules released by the U.S. Department of Education for each award year. The payment schedules take into account the student?s cost of attendance, EFC and enrollment status. Condition Material Weakness? During testing over the eligibility requirements, the following deficiencies were noted: ? 1 of 68 students loan disbursements exceeded the subsidized loan annual limit for first year students. ? 2 of 68 students total financial aid packages exceeded their cost of attendance resulting in an overpayment of Title IV assistance. ? 14 of 68 students were not disbursed the correct amount of Pell grant based on their enrollment status. ? The College failed to report loan disbursement to NSLDS for 1 out of 68 students. Questioned Costs $19,792 of loan disbursements that exceeded the subsidized loan annual limit for first year students. $10,442 of overpayments as a result of inaccurate financial aid package calculations. $3,804 of overpayments and $8,583 of underpayments as a result of inaccurate disbursement calculations. Context The College contracts with a third-party servicer to perform one or more of the functions associated with processing direct payments of Title IV funds on behalf of the school. The overpayment of Pell grants was due to the College not updating the enrollment status of the students. Additionally, the College did not review the service provider?s calculations or reporting of information to ensure compliance with eligibility requirements. A nonstatistical sample of 68 students out of 346 students were selected for eligibility testing. The College disbursed $3,984,674 of Title IV funds to the students attending the College during the 2021-2022 award year. Effect The College is not in compliance with the Federal eligibility requirements described in the OMB Compliance Supplement. Cause The College did not retain supporting evidence or ensure eligibility requirements were met for students under the Pell Grant and Direct Loan Programs. Repeat Finding No Recommendation The College should implement a process to review, update, and verify student eligibility requirements. The College should maintain a document retention policy in order to comply with Title IV laws and regulations.