MICHIGAN STATE UNIVERSITY

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Direct Student Loan Program ALN 84.268 Federal Award Identification Number and Year - Various Pass through Entity - None Finding Type - Significant deficiency Repeat Finding - Yes 2023-003 Criteria - Before an institution disburses Title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program and how and when those funds will be disbursed. If those funds include Direct Loan Program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Except in the case of a post withdrawal disbursement made in accordance with Sec. 668.22(a)(5), if an institution credits a student's account at the institution with Federal Direct Loans, the institution must notify the student or parent of the following: (i) The anticipated date and amount of the disbursement (ii) The student's or parent's right to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the secretary (iii) The procedures and the time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement. Condition - The notifications related to the direct loan borrowers did not include information on the right to cancel or instructions on how to cancel the loans. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the 50 students tested for eligibility with Federal Direct Loans, the disbursement notification sent to the student and/or parent did not include information on the right to cancel or instructions on how to cancel for 3 students/parents during the Fall 2023 semester. Cause and Effect - The University did not have a control in place during the entire year to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans included in the borrower notifications. As a result, borrowers may not have been aware of their right to cancel and how to cancel their Federal Direct Loans. Recommendation - The University should implement controls to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans are properly included in the borrower notifications. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and this issue was fully corrected in January 2024.

Assistance Listing Number, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Direct Student Loan Program ALN 84.268 and Federal Pell Grants ALN 84.063 Federal Award Identification Number and Year - Various Pass-through Entity - None Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-001 Criteria - Changes in a student’s status are required to be reported to the National Student Loan Data System (NSLDS) within 30 days of the change or included in a student status confirmation report sent to the NSLDS within 60 days of the status change (Pell, 34 CFR Section 690.83(b); Direct Loan, 34 CFR Section 685.309(b)). Condition - The University did not report the status changes of certain students to the NSLDS in an accurate and timely manner during the fiscal year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - There were three errors identified that were attributed to this finding: 1) Of the 60 students tested, there were 5 students who withdrew/graduated whose status changes were not reported to the NSLDS within 60 days. 2) Of the 60 students tested, there were 7 students who withdrew/graduated whose status changes were not reported to the NSLDS. 3) Of the 60 students tested, there was 1 student who withdrew whose status change was not reported accurately to the NSLDS. The student withdrew and was reported with an incorrect effective date. Cause and Effect - The University did not have a control in place to ensure all enrollment changes are reported timely and accurately to the NSLDS. As a result, certain student status changes were not reported to the NSLDS in a timely and accurate manner. Recommendation - The University should implement controls to ensure student status changes are reported accurately and timely to the NSLDS. These controls should include a thorough review of the enrollment rosters prior to reporting to the NSLDS. Views of Responsible Officials and Corrective Action Plan - Management agrees with the finding. The University is submitting the data to the NSLDS via the clearinghouse in the required time frame. Certain status changes took place after the standard reporting cycle and were not picked up in this process. New processes have been established to identify and report these status changes to the NSLDS that take place after the standard reporting cycle.

Assistance Listing Number, Federal Agency, and Program Name - Student Financial Assistance Cluster Federal Direct Student Loan Program ALN 84.268, Federal Pell Grants ALN 84.063, and Federal Supplemental Education Opportunity Grant ALN 84.007 Federal Award Identification Number and Year - Various Pass-through Entity - None Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-003 Criteria - If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance but before he or she has attended 60 percent of the scheduled length of the semester, the school must perform a return of Title IV funds (R2T4) calculation. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. A school must return unearned funds for which it is responsible no later than 45 days from the determination of a student's withdrawal (30 days if never attended) (34 CFR 668.22(j)(1)). When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If an institution does not require instructors to take attendance, the withdrawal date is (1) the date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (2) the date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw; (3) if the student ceases attendance without providing official notification to the institution of his or her withdrawal, the midpoint of the payment period or, if applicable, the period of enrollment; (4) if the institution determines that a student did not begin the withdrawal process or otherwise notify the institution of the intent to withdraw due to illness, accident, grievous personal loss, or other circumstances beyond the student’s control, the date the institution determines is related to that circumstance; (5) if a student does not return from an approved leave of absence, the date that the institution determines the student began the leave of absence; or (6) if the student takes an unapproved leave of absence, the date that the student began the leave of absence. Notwithstanding the above, an institution that is not required to take attendance may use as the withdrawal date the last date of attendance at an academically related activity, as documented by the institution (34 CFR668.22(c) and (l)). Condition - The University used inaccurate or incomplete data in the return of Title IV calculations. Questioned Costs - $(1,446) Identification of How Questioned Costs Were Computed - Recalculation of returns was based on accurate student data. Context - There were three errors that were attributed to this finding: 1) Of the 60 students tested, there were 3 students identified where the University had returned the funds untimely (45 days if student attended, 30 days if never attended) 2) Of the 60 students tested, there were 5 students identified where the University completed the R2T4 calculation but the calculation was not completed accurately, resulting in a net of $(1,446) in questioned costs. 3) Of the 60 students tested, noted inconsistency in process in determining if there was an academically related activity that would better reflect the withdrawal date used in the return to Title IV calculation. Cause and Effect - The University did not have a control in place to ensure all returns of Title IV refunds are initiated timely and accurately. As a result, certain student Title IV refund calculations were not completed in a timely and accurate manner. Recommendation - The University should implement controls to ensure returns of Title IV refunds are initiated timely and accurately. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. The failure to return funds in a timely fashion is primarily a result of university withdrawal policy not aligning with the timelines required by the regulations. To that end, the University is revising its policies and procedures, specifically as they relate to medical withdrawals and for programs where attendance is required. As of June 2023, the University now has reports that identify all the affected students in a timely fashion. Additional resources have been allocated to assure that there is consistency and timeliness in the review of enrollment data specifically as it relates to determining attendance in dropped courses and students who rescind their intent to withdraw or enroll in or attend subsequent modules.

Assistance Listing Number, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Direct Student Loan Program ALN 84.268 Federal Award Identification Number and Year - Various Pass-through Entity - None Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-004 Criteria - Before an institution disburses Title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program and how and when those funds will be disbursed. If those funds include Direct Loan Program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Except in the case of a post-withdrawal disbursement made in accordance with Sec. 668.22(a)(5), if an institution credits a student's account at the institution with Federal Direct Loans, the institution must notify the student or parent of the following: (i) The anticipated date and amount of the disbursement (ii) The student's or parent's right to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the secretary (iii) The procedures and the time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement Condition - The notifications related to the direct loan borrowers did not include information on the right to cancel or instructions on how to cancel the loans. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the 50 students tested for eligibility with Federal Direct Loans, the disbursement notification sent to the student and/or parent did not include information on the right to cancel or instructions on how to cancel for 20 students/parents. Cause and Effect - The University did not have a control in place to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans included in the borrower notifications. As a result, borrowers may not have been aware of their right to cancel and how to cancel their Federal Direct Loans. Recommendation - The University should implement controls to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans are properly included in the borrower notifications. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding. Missing notifications to students were a result of a coding error in the automated process that was resolved on September 5, 2023. Notifications to parents did not begin until summer 2023, with an automated procedure being implemented in the fall 2023 semester.

CFDA Number, Federal Agency, and Program Name: Student Financial Assistance Cluster Federal Direct Student Loan Program ALN 84.268 and Federal Pell Grants ALN 84.063 Federal Award Identification Number and Year: Various Pass through Entity: None Finding Type: Material weakness and material noncompliance with laws and regulations Repeat Finding: No Criteria: Changes in a student?s status are required to be reported to the National Student Loan Data System (NSLDS) within 30 days of the change or included in a student status confirmation report sent to the NSLDS within 60 days of the status change (Pell, 34 CFR Section 690.83(b); Direct Loan, 34 CFR Section 685.309(b)). Condition :The University did not report certain students' status to the NSLDS in an accurate and timely manner during the fiscal year. Questioned Costs: None Identification of How Questioned Costs Were Computed: N/A Context: There were six errors identified that attributed to this finding. 1) Of the 60 students tested, there were 42 students who withdrew/graduated whose status changes were not reported to the NSLDS within 60 days. 2) Of the 60 students tested, there were 14 students who withdrew/graduated whose status change were not reported to the NSLDS. 3) Of the 60 students tested, there were 3 students who withdrew/graduated whose status change were not reported to the NSLDS at the program level. 4) Of the 60 students tested, there were 5 students who withdrew/graduated whose status change was not reported accurately to the NSLDS. Student withdrew or graduated and was reported but with an incorrect effective date. 5) Of the 60 students tested, there were 2 students who withdrew/graduated whose status change was not reported accurately to the NSLDS at the campus level. Student withdrew or graduated and was reported but with an incorrect effective date. 6) Of the 60 students tested, there was 1 student who graduated whose status change was not reported accurately to the NSLDS. Student graduated but was reported as withdrawn. Cause and Effect: The University did not have a control in place to ensure all enrollment changes are reported timely and accurately to the NSLDS. As a result, certain student status changes were not reported to the NSLDS in a timely and accurate manner. Recommendation: The University should implement controls to ensure student status changes are reported accurately and timely to the NSLDS. These controls should include a thorough review of the enrollment rosters prior to reporting to the NSLDS. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. The University implemented a new administrative database for student academic records. The provided tool for extracting enrollment data did not perform as expected and hampered the school?s ability to provide the required data to the National Student Clearinghouse. The Registrar?s Office resolved its data collection issues and is now submitting the data to NSLDS via the Clearinghouse on the required timeline.

CFDA Number, Federal Agency, and Program Name: Student Financial Assistance Cluster Federal Direct Student Loan Program ALN 84.268. Federal Award Identification Number and Year: Various Pass through Entity: None Finding Type: Significant deficiency Repeat Finding: No Criteria: Institutions must report all loan disbursements and submit required records to COD within 15 days of disbursement (OMB No. 1845 0021). Each month, COD provides institutions with a School Account Statement (SAS) data file which consists of a Cash Summary, Cash Detail, and (optional at the request of the institution) Loan Detail records. The institution is required to reconcile these files to the institution?s financial records. Condition: The University did not reconcile the SAS data file to its institutional financial records. Questioned Costs: None Identification of How Questioned Costs Were Computed: N/A Context: The University did not reconcile the SAS data file to its institutional financial records. Cause and Effect: The University did not have the proper procedures and controls in place to ensure the reconciliation of the COD SAS data files were properly reconciled to the University's financial records. As a result, the student information reported to the COD could be incomplete or inaccurate. Recommendation: The University should implement procedures and controls to ensure reconciliation's of the COD data files are reconciled to the University financial records accurately and timely each month. Views of Responsible Officials and Planned Corrective Actions: Management agrees with finding. The Office of Financial Aid is now downloading the monthly file from COD and performing the reconciliation as required.

CFDA Number, Federal Agency, and Program Name: Student Financial Assistance Cluster Federal Direct Student Loan Program ALN 84.268 and Federal Pell Grants ALN 84.063 Federal Award Identification Number and Year: Various Pass through Entity: None Finding Type: Material weakness and material noncompliance with laws and regulations Repeat Finding: No Criteria: If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance but before he or she has attended 60 percent of the scheduled length of the semester, the school must perform a return of Title IV funds (R2T4) calculation. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. A school must return unearned funds for which it is responsible no later than 45 days from the determination of a student's withdrawal (30 days if never attended) (34 CFR 668.22(j)(1)). When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If an institution does not require instructors to take attendance, the withdrawal date is (1) the date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (2) the date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw; (3) if the student ceases attendance without providing official notification to the institution of his or her withdrawal, the midpoint of the payment period or, if applicable, the period of enrollment; (4) if the institution determines that a student did not begin the withdrawal process or otherwise notify the institution of the intent to withdraw due to illness, accident, grievous personal loss, or other circumstances beyond the student?s control, the date the institution determines is related to that circumstance; (5) if a student does not return from an approved leave of absence, the date that the institution determines the student began the leave of absence; or (6) if the student takes an unapproved leave of absence, the date that the student began the leave of absence. Notwithstanding the above, an institution that is not required to take attendance may use as the withdrawal date the last date of attendance at an academically related activity, as documented by the institution (34 CFR668.22(c) and (l)). Condition: The University used incorrect or incomplete data in the return of Title IV calculations. Questioned Costs: $6,306 Identification of How Questioned Costs Were Computed: Recalculation of returns was based on accurate student data. Context: There were four errors that attributed to this finding: 1) Of the 60 students tested, there were 18 students identified where the new student information system used inaccurate information to complete the return of Title IV calculation. As a result, the University completed manual calculations and properly corrected 17 of the issues identified with 1 calculation not not completed correctly resulting in $4,719 in questioned costs. 2) Of the 60 students tested there were 40 students identified where the University had returned the funds untimely (45 days if student attended, 30 days if never attended) 3) Of the 60 students tested, there was 1 student with the incorrect Pell grant amount utilized in return of Title IV calculation resulting in $1,587 in questioned costs. 4) Of the 60 students tested, noted process inconsistency in determining if there was an academically related activity that would better reflect the withdrawal date used in the return to Title IV calculation. Cause and Effect The University did not have a control in place to ensure all returns of Title IV refunds are initiated timely and accurately. As a result, certain student Title IV refund calculations were not completed in a timely and accurate manner. Recommendation The University should implement controls to ensure returns of Title IV refunds are initiated timely and accurately. Views of Responsible Officials and Planned Corrective Actions: Management agrees with finding. The new financial aid management database made incorrect R2T4 calculations and prevented manual adjustments to the calculations. The calculations are now done externally to the system and fixes and workarounds have been implemented to allow for the correct processing of R2T4 calculations. As of the Fall 2022 semester R2T4 calculations were being performed in the required timeframe. University personnel were not aware there was a shorter deadline (30 days versus 45 days) to return funds if the student had not begun attendance. Therefore, effective March 15, 2023, funds were being returned within 30 days for students for whom there is no confirmed attendance. Beginning with the fall 2022 semester, the Registrar?s Office has initiated procedures to confirm attendance/academic activity for courses that are dropped. This allows the University to identify whether adjustments need to be made to Pell grants before an R2T4 calculation is performed, and to determine if an R2T4 calculation is required or if all aid is to be returned for non-attendance. The withdrawal process itself has been modified to more clearly identify the withdrawal date.

CFDA Number, Federal Agency, and Program Name Student Financial Assistance Cluster Federal Direct Student Loan Program ALN 84.268 Federal Award Identification Number and Year Various Pass through Entity None Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. (Except in the case of a post withdrawal disbursement made in accordance with Sec. 668.22(a)(5), if an institution credits a student's account at the institution with Direct Loans, the institution must notify the student or parent of (i) The anticipated date and amount of the disbursement; (ii) The student's or parent's right to cancel all or a portion of that loan or loan disbursement, and have the loan proceeds returned to the Secretary; and iii) The procedures and the time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement. Condition The notifications related to the direct loan borrowers did not include information on the right to cancel or instructions on how to cancel the loans. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context Of the all students tested for eligibility with Federal Direct Loans (sample included 32 students), the disbursement notification sent to the student and/or parent did not include information on the right to cancel or instructions on how to cancel. Cause and Effect The University did not have a control in place to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans included in the borrower notifications. As a result, borrowers may not have been aware on their right to cancel and how to cancel their Direct Loans. Recommendation The University should implement controls to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans is properly included in the borrower notifications. Views of Responsible Officials and Planned Corrective Actions - Management agrees with finding. The University?s new financial aid management database does not have the capability to send emails. That functionality does exist in the University?s new student information system. Consequently, effective for Fall 2022 semester, the Office of Financial Aid partnered with Office of the Controller ? Student Accounts to generate emails on a weekly basis to any student who receives a disbursement of Title IV funds. By May 1, 2023 the University will create similar procedures to identify disbursements of Parent PLUS loans and then coordinate with Office of the Controller - Student Accounts to leverage the student information system to send notifications to parent borrowers.

CFDA Number, Federal Agency, and Program Name Student Financial Assistance Cluster Federal Pell Grants ALN 84.063 Federal Award Identification Number and Year Various Pass through Entity None Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Each year, based on the maximum Pell Grant established by Congress, the Department of Education provides to institutions Payment and Disbursement Schedules for determining Pell awards. The Payment Schedule provides the maximum scheduled award a student would receive for a full academic year as a full time student based on their expected family contribution and cost of attendance (COA). The Disbursement Schedules are used to determine annual awards for full time, three quarter time, half time, and less than half time students. All Schedules, however, are based on the COA of a full time student for a full academic year. Condition The University awarded incorrect Pell awards to certain students based on the Pell Payment and Disbursement Schedule. Questioned Costs $7,143 Identification of How Questioned Costs Were Computed Recalculation of the Pell award based on the student's expected family contribution and cost of attendance. Context There were two error identified that attributed to this finding. 1) Of the 47 students tested who received Pell as part of the eligibility sample, there were 5 students who changed their academic load between the census date (quarter term) and the date used to determine eligibility for the purpose of Pell, resulting in an overpayment of Pell due to the student information system using an incorrect enrollment status to calculate the students' Pell award. 2) Of the 47 students tested who received Pell and tested for eligibility, there was 1 student who was not awarded a Pell grant for the Fall semester due to the student information system not properly recognizing the student's enrollment status. Cause and Effect The University did not have a control in place to ensure the Pell awards to students was calculated properly and in accordance with the Pell Payment and Disbursement Schedule. As a result, certain students Pell awards were not calculated properly in accordance with the Pell Payment and Disbursement Schedule. Recommendation The University should implement a control to ensure the Pell awards to students are calculated properly and are in accordance with the Pell Payment and Disbursement Schedule. Views of Responsible Officials and Planned Corrective Actions - Management agrees with finding. The University?s new financial aid management database was modified to use the census date for Pell recalculation rather than an arbitrary number of days into the term that did not match the University policy. The correction for this finding was implemented prior to aid being disbursed for the Fall 2022 semester.

CFDA Number, Federal Agency, and Program Name Student Financial Assistance Cluster Federal Direct Student Loan Program ALN 84.268 and Federal Pell Grants ALN 84.063 Federal Award Identification Number and Year Various Pass through Entity None Finding Type Significant deficiency Repeat Finding No Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by the Department of Education (ED). The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. However, certain applicants are excluded from the verification process as listed in 34 CFR 668.54(b). A menu of potential verification items for each award year is published in the Federal Register, and the items to verify for a given application are selected by ED from that menu and indicated on the student?s output documents. Verification tracking groups and verification items for each award year can also be found in the annual FSA Handbook, Application and Verification Guide, Chapter 4. The institution shall also require applicants to verify any information used to calculate an applicant?s expected family contribution that the institution has reason to believe is inaccurate and provide an accurate code for the individual?s verification status in the Common Origination and Disbursement (COD) system. Condition The University did not obtain the correct tax return as part of the verification process. Questioned Costs $1,050 Identification of How Questioned Costs Were Computed Recalculation of the Pell award using the correct income tax return and accurate expected family contribution. Context Of the 40 students selected for verification, there were 2 students who provided the incorrect income tax return than was requested. As a result, the incorrect expected family contribution was used to determine the students Pell award. Cause and Effect The University did not have a control in place to ensure the proper income tax returns are used in the verification process. As a result, certain students' expected family contribution was inaccurate and incorrect Pell awards were disbursed. Recommendation The University should implement a control to ensure the proper income tax returns are used in the verification process. Views of Responsible Officials and Planned Corrective Actions - Management agrees with finding. The University? initial understanding was that the new financial aid management database extracted the required data from the uploaded documents. When it was discovered that this was not the case, the Office of Financial Aid disabled this functionality in the system and began reviewing all uploaded documents in January 2022 to confirm that they are the required documents.

CFDA Number, Federal Agency, and Program Name - 84.268, U.S. Department of Education, Federal Direct Loans Finding Type - Significant deficiency Repeat Finding - No Criteria - If a student account is credited with Federal Direct Loan funds, the institution must notify student or parent of date and amount, as well as the right to cancel all or portion of loan, and the procedure and time by which the student must notify the institution no earlier than 30 days before and no later than 30 days after crediting student?s account if using an affirmative confirmation process (34 CFR Section 68.165). Institutions not using an affirmative confirmation process must notify the student no earlier than 30 days before, and no later than 7 days after, and must give the students 30 days to cancel all or part of the loan. Condition - Documentation could not be provided to support that notification was sent to the student or parents notifying them of their Federal Direct Loan awards and their right to cancel all or portion of the loan. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - No questioned costs Context - Documentation could not be provided for 10 out of 50 students selected for testing to support that they were notified of the Federal Direct Loans they were awarded. Based on the testing performed, it does not appear that this is a systemic issue for the remaining population related to notification of Federal Loan awards to students and parents and their right to cancel all or portion of the loan. Cause and Effect - A record of the notification email or letter required to be sent to students or parents could not be produced indicating some students or parents may not have been notified of the Federal Direct Loans and did not have the opportunity to cancel these awards. Recommendation - A system should be put in place to review students that received Federal Direct Loans to verify notification letters were sent to each student. Documentation should also be maintained to support that students were notified of the federal direct loans they are being awarded. Views of Responsible Officials and Corrective Action Plan - The University agrees with the finding identified above. The University acknowledges the requirement to maintain record of the generation and distribution of these notifications, which is done by keeping a backup of the electronic files on archive servers. During the audit period, it was discovered that some of the backup files could not be located and that, in turn , was found to be the result of a change in the file naming. The University has reviewed the series of batch jobs that ensures emails are sent to all students/borrowers who receive a loan disbursement with the required notifications. The University has also begun retaining the primary server record of notifications, in addition to the backup server, to improve redundancy in record retention. Further, technology staff have developed an improved process for archiving files to ensure that no records can be left out due to disbursement dates and program run dates. The University will be implementing a new financial/aid student software for the 2021-2022 award year and has targeted the notification process to ensure no further issues.

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