08/08/2016
Missouri State Auditor Nicole Galloway today released an audit of the Department of Higher Education, which raises concerns with one of the department's loan programs. The Advantage Missouri state-run loan program offered forgivable loans to students who committed to working in high-demand occupations in the state, but program staff did not properly track or monitor outstanding loans. They also failed to communicate with former students to ensure the terms of the loan agreements had been met and information was accurately documented.
"Advantage Missouri was designed to help students get necessary financial assistance and commit to staying in Missouri as they began their careers. The state should be the ideal lender, not one that creates credit problems for students down the road," Auditor Galloway said. "My audit found mismanagement at every step, beginning with not putting clear rules in place to guide the loan process. This led to borrowers not receiving proper notification and a system that was not set up to monitor loan statuses or keep records up to date."
Of approximately $8 million issued to students over a decade ago, more than $5 million remains unpaid, but department officials have not determined whether unpaid amounts should be forgiven under the terms of the loans. Auditors also found that, in addition to lacking accurate records for individual loans, the department failed to implement a set of rules outlining the terms of the program, including conditions for loan repayment, forgiveness or default.
If enacted, these rules could have provided an organizational framework for staff to track the loans and follow-up to ensure accountability.
The audit also raised concerns about the potential for unauthorized access to confidential student information maintained in a department database. The database is available for use by employees of institutions around Missouri. Although users sign a user agreement, the department lacks adequate procedures to ensure only authorized personnel access the system and to remove outdated user accounts when no longer needed.
The Department of Higher Education received an overall performance rating of "fair." The complete audit can be found online here. This is the first in a series of four Missouri higher education audits. Ongoing higher education audits include statewide college affordability at public universities, performance funding and an audit of the University of Missouri System Administration.
