Finding Text
Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($1,222,088) Award Number: P268K233315 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: $7,420 Condition Found: The University held excess cash of $7,420 from the Federal Direct Program for more than three days. Criteria: The University was placed on the Heightened Cash Monitoring Method II in May 2023. The University is not allowed to hold excess cash. However, excess cash was held for more than three days from the Federal Direct Loan Program. Cause: The third-party administrator posted a $10,142 Federal Direct Loan return of funds to COD for a student and a total of $2,722 Federal Direct Loans in disbursements to COD for another student. The third-party administrator never returned the $7,420 net of these two transactions to the Department of Education via G5. Three months of monthly Federal Direct Loan reconciliations failed to detect the error as well. Possible Asserted Effect: The University held $7,420 of excess cash. Repeat Finding: There was not a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend that the Student Financial Aid Director and CFO of the University meet with the third-party administrator to determine why the funds were not returned timely and how the monthly Federal Direct Loan reconciliations did not detect the error. $7,420 of Federal Direct Loan funds should be returned to the Department of Education. Management Response: The Student Financial Aid Director and CFO of the University will meet with the third-party administrator in during fiscal year 2024. The $7,420 of Federal Direct Loan program funds were returned on December 15, 2023.