Finding Text
Program Information: Federal Direct Student Loan Program (ALN 84.268)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Borrower Data Transmission and Reconciliation - Direct Loans - Each month, the U.S. Department of Education’s Common Origination and Disbursement system (the “COD”) provides institutions with a School Account Statement (“SAS”) data file which consists of a Cash Summary, Cash Detail, and (optional at the request of the school) Loan Detail records. The school is required to reconcile these files to the institution’s financial records. Since up to three Direct Loan program years may be open at any given time, schools may receive three SAS data files each month (34 CFR sections 685.102(b), 685.301, and 303).
Condition: Certain instances were identified during the year where the University was unable to support that a reconciliation was performed between the SAS data files provided from the COD and the University’s financial records.
Cause: Lack of internal control and administrative oversight.
Effect or Potential Effect: The University is not in compliance with requirements related to the reconciliation of Federal Direct Student Loan Program disbursement information.
Questioned Costs: Unknown.
Context: For 4 of 4 months selected for testing, the University was unable to provide documentation supporting that a reconciliation had been performed between the University’s financial records and the SAS data files received from the COD.
Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2020-014 in the prior year schedule of findings and questioned costs.
Recommendation: We recommend the University enhance its internal controls and procedures to ensure that reconciliations between financial records and the COD information are performed at least monthly, and that appropriate documentation is supporting the reconciliation is retained.
Views of Responsible Officials and Planned Corrective Actions: With the implementation of Ellucian Colleague this issue has been resolved. The financial aid and business offices are directly involved with the COD processes weekly. This process sends originations and disbursement information for PELL and Federal loans to COD. Funds are transmitted to a student’s account through a two-part process called FATR between the two offices. With the implementation of Colleague, we have resolved those issues. Colleague's Financial Aid module provides the tools necessary to maintain, track, process, and report information associated with financial aid applicants and recipients to Colleague. The Financial Aid module helps manage the processing of financial aid, data, and reporting and will give SAU internal controls over their Title IV Student Financial Aid programs. Using this system, SAU can create and modify Grant records for submission to COD and import and reconcile Grant data. The financial aid office did not have these options in CAMS. The financial aid office no longer builds and or disburses aid manually in COD. Colleague and COD work together. The reconciliation process for Pell and Direct Loans to self-audit, ensuring the accuracy and validity of financial data sent and submitted to COD. The reconciliation process in completed monthly and any discrepancies are resolved prior to the next month.