Section III – Findings and Questioned Costs – Major Federal Programs (Continued)
Federal Agency: US Department of Education
Federal Program Name: Federal Perkins Loan Program
Assistance Listing Number: 84.038
Federal Award Identification Number and Year: N/A
Award Period: July 1, 2023 – June 30, 2024
Type of Finding:
Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 674.19.(e), states an institution must retain promissory and master promissory notes (MPN), and repayment records for each Perkins Loan program loan made. The original promissory notes and repayment schedules must be kept until the loans are satisfied. An institution shall retain disbursement and electronic authentication and signature records for each loan made using an MPN for at least three years from the date the loan is canceled, repaid, or otherwise satisfied.
Condition: Certain loan MPNs were not retained for the three-year retention period.
Context: During our testing, Twenty-two out of forty open loans tested and forty out of forty of the loans assigned tested, the University was unable to locate the original promissory note and/or MPN.
Cause: The University does not have a review process in place to ensure the MPNs are kept for at least three years from the date the loan is cancelled, repaid, or otherwise satisfied.
Effect: The University does not have a proper internal control system for the Federal Perkins Loan Program.
Repeat Finding: Yes, 2023-19
Recommendation: We recommend that the University keep MPNs for loans for the three-year retention period.
Views of responsible officials: There is no disagreement with the audit finding.