Finding Text
2022-004 Department of Education Student Financial Aid Cluster CFDA # 84.268 ? Federal Direct Student Loans 2021-2022 Award Year Special Tests and Provisions ? Borrower Data Transmission and Reconciliation (Direct Loan) Significant Deficiency in Internal Controls over Compliance Criteria: 34 CFR sections 685.301 and 685.303 provide the criteria and guidance for origination and processing of direct loans. Presentation College is required to reconcile the monthly School Account Statement (SAS) data file to the institution?s financial records. Condition: When testing special tests and provisions related to COD, we noted the following: ?9 of the 12 monthly SAS reconciliations were not completed by Presentation College. ?1 of 60 students was incorrectly reported to COD as having received Title IV funds. Cause: Lack of oversight over the monthly reconciliation control resulted in 9 months of reconciliations that were not performed by Presentation College and variances/discrepancies that were not investigated. For the 1 student error, a batch process pushed the loan disbursement to COD, but the student did not receive the loan disbursement in the student account, so funds were never disbursed to student. Effect: The lack of monthly reconciliations of SAS data files can result in discrepancies not being found in a timely manner between amounts reported in COD compared to the institution?s records. Lack of reconciliations did result in an error of a student not receiving a loan that was reported to COD. Questioned Costs: None reported. Context/Sampling: All 12 monthly reconciliations were selected for testing to ascertain that a reconciliation is being performed on a monthly basis. Repeat Finding from Prior Year(s): Yes. Recommendation: We recommend that controls be revised to ensure that a monthly reconciliation of the SAS data file is being performed on a monthly basis going forward and a review process be in place to ensure the reconciliations are completed by someone outside of the person preparing the reconciliation. Views of Responsible Officials: Management agrees with the finding.