Finding Text
Federal Agency: Department of Education
Federal Program Title: Student Financial Assistance Cluster
Assistance Listing Number: 84.007, 84.033, 84.063, 84.268
Federal Award Identification Number: P007A223424-2023, P033A223424-2023, P063P220352-2023,
and P268K220352-2023
Award Period: 7/1/22-6/30/23
Type of Finding: Material Weakness in Internal Control over Compliance; Compliance, Material
Noncompliance
Condition: The University did not properly notify students when loans were credited to the student's ledger
account.
Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or
parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to
cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder
of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the
student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or
TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are
disbursed by EFT payment or master check. Additionally per 2 CFR 200.303, nonfederal entities receiving
federal awards are required to establish and maintain internal controls designed to reasonably ensure
compliance with federal laws, regulations, and program compliance requirements.
Context: During our Eligibility testing of 60 students, we noted that there were 43 students that received
loan disbursements however, all 43 students did not receive the required notification for each loan
disbursement.
Questioned costs: N/A
Cause: The University did not send loan disbursement notifications.
Effect: Students were not made aware of the anticipated date and amount of loan disbursement for the right
to cancel all or a portion of the loan in the required amount of time.
Repeat finding: Yes, 2022-013
Recommendation: We recommend the University evaluate its procedures around disbursements of loans
and ensure that notifications of disbursements are sent and contain all the required elements outlined in the
FSA handbook.
Views of responsible officials: Management agrees with the finding and has developed a plan to correct
the finding.