UNIVERSITY OF MARY HARDIN-BAYLOR

Finding 2025-001 Department of Education Student Financial Aid Cluster Federal Financial Assistance Listing #84.268 – Federal Direct Student Loans, Award Year 2025, Award Numbers P268K252288 Special Tests and Provisions – Enrollment Reporting Significant Deficiency in Internal Controls over Compliance and Compliance Criteria: 34 CFR 685.309 sets forth the criteria for administrative and fiscal control and accounting requirements for schools participating in the Federal Direct Loan Program in regard to enrollment reporting requirements. Condition: Four students had incorrect status change effective dates reported to NSLDS. Cause: An error in system parameters caused the automated reporting module to transmit the date of student file change rather than the actual date of enrollment status changes. Effect: The errors in reporting resulted in reporting dates incorrectly or not reported to NSLDS. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 60 students with a change in status out of 1,473 students with a change in status were selected for enrollment reporting requirements. Repeat Finding from Prior Year(s): No Recommendation: We recommend a spot check be completed on a monthly basis of changes to ensure those changes are properly reported. We specifically recommend any known, unusual situations be reviewed on the NSLDS site to ensure they were properly reported. Views of Responsible Officials: Management agrees with the finding.

Federal Agency Name: U.S. Department of Education Program Name: Student Financial Assistance Cluster ALN: 84.268 Federal Award Number: P268K222288, P268K232288 Award Year: 2022-2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions – Notification of Loan Disbursement Criteria: Per 34 CFR 668.165(a), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan, or TEACH Grant program funds, the institution must notify the student or parent of the anticipated date and amount of the disbursement, the student or parent’s right to cancel all or a portion of the loan, and the procedures by which the institution must be notified if he or she wishes to cancel the loan.

UMHB requires students to provide affirmative confirmation of Title IV award amounts. Per 34 CFR 668.165(a), institutions that obtain affirmative confirmation of the accepted loan amounts must provide the aforementioned disbursement notice in writing no earlier than 30 days before, and no later than 30 days after, crediting the student's institutional account.

Condition: We tested a sample of 40 students who received Title IV funds during the year. Of those students, we tested disbursement notification records for the 36 students who received Direct Loans during the year.

We noted errors in two student files. Two students were notified of Spring 2023 Direct Loan disbursements more than 30 days after their student accounts were credited with the disbursements. We did not note any resulting inappropriate credit balances on the student accounts. Upon additional review, the University identified a total of 100 students who received late loan disbursement notifications.

Cause: Loan disbursement notifications are provided to a list of students following each round of aid disbursements. The list of students who require notification comes from a financial aid software report. Financial aid staff provide notifications based on the generated list.

One report of Spring 2023 disbursements incorrectly excluded a set of 100 Spring 2023 transfer students. The error was identified after the 30 day disbursement notification timeframe and prior to the beginning of the Single Audit. The University corrected the system generated report parameters and provided students with notification of the disbursements as soon as possible after the omission was discovered.

Effect: Certain students may have been temporarily unaware that they had Title IV funds applied to their account and available for their use.

Questioned Costs: None reported.

Context/Sampling: A nonstatistical sample of 40 students who received $791,187 in Title IV Aid, out of a population of 2,668 students who received $44,639,514 in Title IV aid. 2 of the students had errors in loan disbursement notification. These two students were included in the 100 Spring 2023 transfer students identified by the client. This group of 100 students received $1,310,535 in aid.

Repeat Finding from Prior Year: No

Recommendation: We recommend the University perform a review of all automated loan disbursement report parameters to ensure that reports of loan disbursements properly include all students receiving loan disbursements.

View of Responsible Officials: Management agrees with the finding. See Corrective action plan.