KENTUCKY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2023
Section III – Findings and Questioned Costs – Major Federal Programs (Continued)
2023 – 020 – Direct Loan Reconciliation
Federal Agency: U.S. Department of Education
Federal Program Name: Federal Direct Student Loan
Assistance Listing Number: 84.268
Federal Award Identification Number and Year: P268K230147; P268K240147-2023
Award Period: July 1, 2022 – June 30, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.300(b)(5), states though a school decides the frequency and methods it will use for internal reconciliation, Direct Loan reconciliation must occur at least monthly and should occur before the required monthly reconciliation to the Direct Loan SAS. School's must maintain documented results of its monthly reconciliation to provide to auditors and reviewers at their request.
Condition: Direct loan reconciliations between the COD, G5 and student accounts did not have evidence of being reviewed.
Questioned costs: None.
Context: During our testing, 1 out of 3 direct loan reconciliations tested did not have evidence of being reviewed.
Cause: The University did not adhere to controls in place for all reconciliations.
Effect: The University is not complying with internal policy.
Repeat Finding: No.
Recommendation: We recommend management maintain proper recordkeeping and retention of documentation and review of such documentation.
Views of responsible officials: There is no disagreement with the audit finding.
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