Finding Text
2023-001
Federal Agency: Department of Education
Federal Program Title: Student Financial Assistance Cluster
Assistance Listing Number: 84.038, 84.268, 84.033, 84.007, 84.063, 84.268, 93.264
Award Period: July 1, 2022 to June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance, and Other matter
Criteria or Specific Requirement: The Code of Federal Regulations, 34 CFR 674.19(e) states that Institutions must retain original, true and exact copies of promissory and master promissory notes (MPN), repayment records, and cancellation and deferment requests for each Perkins loan made. An original electronically signed MPN must be retained by the institution for 3 years after all the loans made on the MPN are satisfied.
Condition: During our testing, we noted for 4 out of 80 Perkins files tested, the MPN was not retained on file. These files were paid in full and the original MPN was sent to the borrower with the paid in full communication.
Questioned Costs: None reported
Context: The MPNs for the 5 students were not kept for at least three years as required by the regulation.
Cause: The loans were paid in full, and the University was not aware of the requirement to retain a copy of the MPN for at least 3 years after the loan was satisfied.
Effect: The University was not in compliance with the Perkins recordkeeping regulations.
Repeat Finding: No
Recommendation: We recommend the University implement a procedure moving forward to ensure that all necessary MPNs are retained for at least 3 years after payment in accordance with the federal regulation.
Views of Responsible Officials: There is no disagreement with the audit finding.