Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 84.038, U.S. Department of Education, Federal Perkins Loans Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes - 2021-006 Criteria - The Seminary must (1) retain true and exact copies of promissory and master promissory notes (MPN), repayment records, and cancellation and deferment requests for each Perkins loan (including Defense, NDSL) made and (2) retain disbursement records, electronic authentication, and signature records for loans made with an MPN in accordance in the manners set forth in 34 CFR 674.19(e). Condition - The Seminary was unable to support that required records were retained for outstanding Perkins loans. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Seminary ceased using its third party servicer upon electing to liquidate the Perkins Loan Program in 2019, but the Seminary did not complete the liquidation process in a timely manner. Due to the delay in completion of the liquidation process until 2022, the Seminary did not retain the appropriate records from the servicer to appropriately track any of the remaining outstanding loans. Cause and Effect - The Seminary did not have formal procedures and controls over the Perkins Loan Program after the election to liquidate the program to retain the appropriate records, and, as a result, the remaining regulations were not followed by the Seminary. Recommendation - Although the Seminary has substantially completed the liquidation of the Perkins Loan Program during 2022, the Seminary should understand and maintain processes and controls over the programs the Seminary participates in to ensure compliance. Views of Responsible Officials and Planned Corrective Actions - The Seminary has finalized the closeout of the Perkins Loan Program (except for the audit final step, which is to be conducted as part of the 2022 audit). The Seminary has purchased the loans that were not accepted by the Department of Education.