FAC Explorer

Audit 330883

FY End
2024-06-30
Total Expended
$60.23M
Findings
8
Programs
12
Organization: Universidad Carlos Albizu, Inc. (PR)
Year: 2024 Accepted: 2024-12-04
Auditor: Galindez LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
512998 2024-001 Significant Deficiency Yes CN
512999 2024-002 Significant Deficiency - N
513000 2024-003 Significant Deficiency - N
513001 2024-004 Significant Deficiency - N
1089440 2024-001 Significant Deficiency Yes CN
1089441 2024-002 Significant Deficiency - N
1089442 2024-003 Significant Deficiency - N
1089443 2024-004 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $46.58M Yes 3
84.063 Federal Pell Grant Program $5.43M Yes 1
93.556 Marylee Allen Promoting Safe and Stable Families Program $2.25M - 0
84.425 Education Stabilization Fund $1.84M Yes 0
84.031 Higher Education Institutional Aid $1.06M Yes 0
84.184 School Safely National Activities $847,383 Yes 0
93.925 Scholarships for Health Professions Students From Disadvantaged Backgrounds $675,000 Yes 0
93.191 Graduate Psychology Education $592,372 - 0
84.033 Federal Work-Study Program $555,826 Yes 0
84.116 Fund for the Improvement of Postsecondary Education $296,728 - 0
84.007 Federal Supplemental Educational Opportunity Grants $46,000 Yes 0
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $3,980 - 0

Contacts

Name Title Type
LBAJDXALYHT4 Carmen Rivera Laboy Auditee
7877256500 Taireli Hidalgo Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: a. The Schedule is prepared from the University’s accounting records. b. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. d. The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indirect cost rate for other federal programs, since no allocation of indirect costs was made on such. De Minimis Rate Used: Y Rate Explanation: The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indire The accompanying supplementary Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of Universidad Carlos Albizu, Inc. (the University) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the University’s financial statements. Because the Schedule presents only a selected portion of the activities of the University, it is not intended to, and does not present the financial position, changes in net assets, and cash flows of the University. Funds received for students’ financial assistance (principally Pell Grant and Federal Direct Student Loan Program) that are awarded directly to students for educational purposes are excluded from revenues and expenses. These grants are applied to the students’ tuition and fees and any excess is paid to the students.
Title: Summary of Significant Accounting Policies Accounting Policies: a. The Schedule is prepared from the University’s accounting records. b. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. d. The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indirect cost rate for other federal programs, since no allocation of indirect costs was made on such. De Minimis Rate Used: Y Rate Explanation: The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indire a. The Schedule is prepared from the University’s accounting records. b. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. d. The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indirect cost rate for other federal programs, since no allocation of indirect costs was made on such.
Title: Assistance Listing Number Accounting Policies: a. The Schedule is prepared from the University’s accounting records. b. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. d. The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indirect cost rate for other federal programs, since no allocation of indirect costs was made on such. De Minimis Rate Used: Y Rate Explanation: The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indire Assistance Listing Numbers (ALN) included in the Schedule are determined based on the program name, review of grant contract information and the public descriptions of federal assistance listings published by the U.S. Government on sam.gov.
Title: Loan Program Accounting Policies: a. The Schedule is prepared from the University’s accounting records. b. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. d. The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indirect cost rate for other federal programs, since no allocation of indirect costs was made on such. De Minimis Rate Used: Y Rate Explanation: The University elected to apply the 10% de minimis indirect cost rate in accordance with 2 CFR 200.414(f) for the Mental Health Service Professional Demonstration Grant Program, with a total of $37,035 applied under this rate. The University did not use the 10% de minimis indire The University participates in the Federal Direct Student Loan Program (Direct Loans) (ALN 84.268). Loans made through the Direct Loans program are provided by the federal government; accordingly, the disbursements under the program and the outstanding loan balances are excluded from the financial statements of the University. However, such program is considered a component of the student financial assistance program at the University. Federal expenditures for these loans are determined when loans are made to students. The balance of loans for previous years is not considered federal expenditures of the current year because the lender accounts for them. Direct Loans are made by the Secretary of Education. The Student’s Aid Reports (SAR) or Institutional Student Information Record (ISIR), along with other information, is used by the University to originate a student’s loan. New loans processed for students during the year ended June 30, 2024 amounted to $46,582,480.

Finding Details

Finding 2024-001
Finding No. 2024-001 Excess cash Federal Program ALN 84.268 Federal Direct Student Loans Program Name of Federal Agency U.S. Department of Education Category Other matters – C. Cash Management; N. Special test Return of Title IV Funds Significant deficiency of internal controls over compliance Criteria As per the Code of Federal Regulations 34 CFR 668.166: Excess cash is any amount of FSA funds, other than Federal Perkins Loan Program funds, that an institution does not disburse to students or parents by the end of the third business day following the date the institution received those funds from the Department; or deposited or transferred to its depository account previously disbursed FSA funds received from the Department, such as those resulting from award adjustments, recoveries, or cancellations. Sometimes a school cannot disburse funds in the required three business days because of circumstances outside the school’s control. If unusual circumstances exist, an institution may retain an excess cash tolerance for up to seven calendar days for an additional amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The school must immediately return to the Department any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the additional seven-day tolerance period. Condition found In nine (9) of fifty-three (53) return drawdowns from the San Juan Campus, adjustments were not properly returned on G-5, creating excess cash for more than the required period of ten (10) days (three (3) business days plus an additional seven (7) calendar days). In addition, refunds were not returned on G-5 in a timely manner during the required period of thirty (30) days. Return date Return Amount Return on G-5 date Days passed 01/10/2024 $ (6,761) 03/06/24 56 01/11/2024 (6,761) 03/06/24 55 01/11/2024 (6,761) 03/06/24 55 01/16/2024 (4,948) 03/06/24 50 01/16/2024 (9,895) 03/06/24 50 01/18/2024 (6,761) 03/06/24 48 01/18/2024 (5,244) 03/06/24 48 01/22/2024 (16,656) 03/06/24 44 01/24/2024 (10,884) 03/06/24 42 $ (74,671) Cause Miscommunication between the finance departments and financial aid of San Juan campus. The financial aid department communicated the adjustments in students enrollment but the finance department did not returned the funds on time. In addition, lack of monitoring of excess of cash led to the condition. Effect Return of funds in G-5 took longer than the ten-day tolerance period, resulting in excess cash. Upon a finding that an institution maintained excess cash for any amount or time over that allowed in the tolerance provisions in paragraph (b) of section § 668.166, the actions the Secretary may take include, but are not limited to— (1) Requiring the institution to reimburse the Secretary for the costs the Federal government incurred in providing that excess cash to the institution; and (2) Providing funds to the institution under the reimbursement payment method or heightened cash monitoring payment method described in § 668.162(c) and (d), respectively. Questioned cost None. The funds were returned. Context Total amount of funds returned that were late was $74,671 out of a total of $395,282 for the campus of San Juan. The average of days passed between disbursement date and date of return of funds was approximately 50 days. Return of funds corresponds to adjustments in students enrollment after the drawdown of funds on G-5 system. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2023-001. Recommendation We recommend that the University include specific processes for returning funds in its internal procedures and policies. These procedures need to include the time frame for returning funds and the personnel responsible for it. This will assist in safeguarding the timeliness and accuracy of the funds returned to the federal program. In addition to specifying time frames and responsible personnel for the return of federal funds, the University should implement a monitoring system to track these transactions and implement a system of periodic reviews that ensure the procedures remain up to date with cash management regulations. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.
Finding 2024-002
Finding No. 2024-002 Late Refund Issuance Federal Program ALN 84.268 Federal Direct Student Loans Program Name of Federal Agency U.S. Department of Education Category Other matters – N. Special test Disbursements to or on behalf of students Significant deficiency of internal controls over compliance Criteria 34 CFR Section 668.22(a) states that: Whenever an institution disburses Title IV, HEA program funds by crediting a student's account and the total amount of all title IV, HEA program funds credited exceeds the amount of tuition and fees, room and board, and other authorized charges the institution assessed the student, the institution must pay the resulting credit balance directly to the student or parent as soon as possible but— (1) No later than 14 days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (2) No later than 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period Condition found During our evaluation of compliance with these requirements, we noted one (1) instance, or six percent (6%) of the sixty (60) samples selected, in which the University failed to return the corresponding refund within 14 days time frame from the date the University determined that the student had a Federal Student Aid (FSA) credit balance. Forty-one (41) days passed between the date the University identified an FSA credit balance for the student and the actual refund to the student. Finding Number Related Audit Compliance Requirement Student Identifier OPEID Pell Disbursed ($) Pell Underpayment ($) Pell Overpayment ($) Direct Loan Disbursed ($) Direct Loan Underpayment ($) Direct Loan Overpayment ($) 2024-002 Special Tests - Disbursements to students Student 1 1072401 $ - $ - $ - $ 1,793 $ - $ - Cause The Direct Loan posting was processed and posted on 8/15/2023. At the time, the student had an outstanding balance owed to the institution of $2,922. Given this balance, the University initially held the refund of $1,793 instead of applying it to the next term, SP23. Another posting for $2,722 was generated on 8/15/2023, the same day as the Direct Loan posting, which meant that the withheld refund no longer needed to be applied to the SP23 term, but due to it all happening on the same day, it was overlooked. Effect Failure to issue refunds within the required timeframe may cause financial hardship to students and expose the institution to non-compliance with Title IV regulations, potentially leading to penalties or corrective action from the Department of Education. Questioned cost None. The funds were returned. Context As part of our compliance tests with the disbursement requirements, we selected a sample from fifty-one (51) students out two thousand four hundred sixty-five (2,465) who received direct loans. Our test disclosed one (1) instance where the refund was not returned on a timely basis. Identification of a repeat finding This is not a repeat finding. Recommendation We recommend that the institution review its refund processing procedures to ensure timely issuance of credit balance refunds within the 14-day window. Implementing internal controls and automated alerts within the system can help flag accounts for timely refund processing to avoid future delays. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.
Finding 2024-003
Finding No. 2024-003 Timely Return on Title IV Funds Federal Program ALN 84.063 Federal Pell Grant Program Name of Federal Agency U.S. Department of Education Category Other matters – N. Special test Return of Title IV Funds Significant deficiency of internal controls over compliance Criteria Under 34 CFR § 668.22(j), An institution must return the amount of title IV funds for which it is responsible under paragraph (g) as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew. Condition found In testing compliance with the return of Title IV funds requirement, we noted three (3) cases, or eight percent (8%), of the sample selected which included students that received Pell and Direct loans, in which the University failed to return the total corresponding refund within 45 days from the date the University determined that the student withdrew, dropped-out, or failed to attend to the University, as follows: Finding Number Related Audit Compliance Requirement Student Identifier OPEID Pell Disbursed ($) Pell Underpayment ($) Pell Overpayment ($) Direct Loan Disbursed ($) Direct Loan Underpayment ($) Direct Loan Overpayment ($) 2024-003 Special Tests - Timely Return of Title IV Funds Student 1 1072401 $ 3,698 $ - $ - $ - $ - $ - 2024-003 Special Tests - Timely Return of Title IV Funds Student 2 1072401 $ 3,323 $ - $ - $ - $ - $ - 2024-003 Special Tests - Timely Return of Title IV Funds Student 3 1072401 $ 3,698 $ - $ - $ - $ - $ - Cause The return of tittle IV funds calculation process was conducted and completed on time in the Student Financial Assistance (SFA) office. However, updating the SFA module in Ellucian (school ISIS) was not flagged as valid. This omission meant that the University was unable to generate a cancelation payroll to close the transaction. Effect Failure to return unearned Title IV funds within the required 45-day timeframe can result in potential financial liabilities for the institution, non-compliance penalties, and a negative impact on the institution's participation in federal financial aid programs. Questioned cost None. The funds were returned. Context Three (3) of eleven (11) withdrawal forms from students who received Pell Grants from both campuses reviewed were not timely reimbursed to the Department of Education. The total amount of funds returned late was $5,688 out of a total of $10,512 for the campus of Miami. Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend that the institution implement enhanced monitoring controls within the financial aid system to ensure that all return of tittle IV funds calculations trigger the necessary flags to prompt timely returns of unearned Title IV funds. Additionally, staff should be trained in monitoring these processes to prevent further delays in compliance with federal regulations. The institution should address the deficiencies noted and review all return of tittle IV funds processes to avoid recurrence and to ensure compliance. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.
Finding 2024-004
Finding No. 2024-004 Delay in Direct Loan Adjustment After Enrollment Cancellation Federal Program ALN 84.268 Federal Direct Student Loans Program Name of Federal Agency U.S. Department of Education Category Other matters – N. Special test Return of Title IV Funds Significant deficiency of internal controls over compliance Criteria Per federal regulations (34 CFR § 685.303(b)), when a student’s enrollment status changes, such as through withdrawal or cancellation, any disbursed Title IV aid, including Pell Grants and Direct Loans, must be adjusted and returned to the Department of Education (DE) in a timely manner. Institutions are required to follow Return to Title IV (R2T4) procedures to ensure that funds are correctly adjusted based on the student's enrollment status. Condition found During our eligibility test, we identified a situation in which a student's enrollment was canceled after Pell and Direct Loan funds had already been credited to the student's account. Even though the Pell Grant adjustment and return to common origination disbursement (COD) were completed promptly, the adjustment for the Direct Loan was made after the audit tests disclosed that the loan had not been properly adjusted and returned to the Department of Education, as follows: Finding Number Related Audit Compliance Requirement Student Identifier OPEID Pell Disbursed ($) Pell Underpayment ($) Pell Overpayment ($) Direct Loan Disbursed ($) Direct Loan Underpayment ($) Direct Loan Overpayment ($) 2024-004 Eligibility Tests Student 1 1072400 $ - $ - $ - $ 5,010 $ - $ 5,010 Cause The Pell Grant program’s financial aid officer properly reported the adjustment to the fund on a timely basis. However, the SSFA officer responsible for the adjustment did not execute the corresponding Direct Loan adjustment. Effect The failure to promptly adjust and return Direct Loan funds may result in non-compliance with Title IV regulations. This could lead to potential penalties, the loss of institutional eligibility to participate in Title IV programs, and incorrect reporting to the Department of Education. Questioned cost None. The funds were returned. Context One (1) out of the sixty (60) student ledgers reviewed in the eligibility test indicated that the Direct Loan enrollment cancellation adjustment was not performed in a timely manner. Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend that the institution strengthen its internal controls and communication between departments responsible for managing Title IV funds to ensure timely adjustment and return of all federal funds upon changes in student enrollment status. Implementing a formal review process and automating alerts within the financial aid system can help prevent delays in future adjustments and ensure compliance with federal regulations. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.
Finding 2024-001
Finding No. 2024-001 Excess cash Federal Program ALN 84.268 Federal Direct Student Loans Program Name of Federal Agency U.S. Department of Education Category Other matters – C. Cash Management; N. Special test Return of Title IV Funds Significant deficiency of internal controls over compliance Criteria As per the Code of Federal Regulations 34 CFR 668.166: Excess cash is any amount of FSA funds, other than Federal Perkins Loan Program funds, that an institution does not disburse to students or parents by the end of the third business day following the date the institution received those funds from the Department; or deposited or transferred to its depository account previously disbursed FSA funds received from the Department, such as those resulting from award adjustments, recoveries, or cancellations. Sometimes a school cannot disburse funds in the required three business days because of circumstances outside the school’s control. If unusual circumstances exist, an institution may retain an excess cash tolerance for up to seven calendar days for an additional amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The school must immediately return to the Department any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the additional seven-day tolerance period. Condition found In nine (9) of fifty-three (53) return drawdowns from the San Juan Campus, adjustments were not properly returned on G-5, creating excess cash for more than the required period of ten (10) days (three (3) business days plus an additional seven (7) calendar days). In addition, refunds were not returned on G-5 in a timely manner during the required period of thirty (30) days. Return date Return Amount Return on G-5 date Days passed 01/10/2024 $ (6,761) 03/06/24 56 01/11/2024 (6,761) 03/06/24 55 01/11/2024 (6,761) 03/06/24 55 01/16/2024 (4,948) 03/06/24 50 01/16/2024 (9,895) 03/06/24 50 01/18/2024 (6,761) 03/06/24 48 01/18/2024 (5,244) 03/06/24 48 01/22/2024 (16,656) 03/06/24 44 01/24/2024 (10,884) 03/06/24 42 $ (74,671) Cause Miscommunication between the finance departments and financial aid of San Juan campus. The financial aid department communicated the adjustments in students enrollment but the finance department did not returned the funds on time. In addition, lack of monitoring of excess of cash led to the condition. Effect Return of funds in G-5 took longer than the ten-day tolerance period, resulting in excess cash. Upon a finding that an institution maintained excess cash for any amount or time over that allowed in the tolerance provisions in paragraph (b) of section § 668.166, the actions the Secretary may take include, but are not limited to— (1) Requiring the institution to reimburse the Secretary for the costs the Federal government incurred in providing that excess cash to the institution; and (2) Providing funds to the institution under the reimbursement payment method or heightened cash monitoring payment method described in § 668.162(c) and (d), respectively. Questioned cost None. The funds were returned. Context Total amount of funds returned that were late was $74,671 out of a total of $395,282 for the campus of San Juan. The average of days passed between disbursement date and date of return of funds was approximately 50 days. Return of funds corresponds to adjustments in students enrollment after the drawdown of funds on G-5 system. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2023-001. Recommendation We recommend that the University include specific processes for returning funds in its internal procedures and policies. These procedures need to include the time frame for returning funds and the personnel responsible for it. This will assist in safeguarding the timeliness and accuracy of the funds returned to the federal program. In addition to specifying time frames and responsible personnel for the return of federal funds, the University should implement a monitoring system to track these transactions and implement a system of periodic reviews that ensure the procedures remain up to date with cash management regulations. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.
Finding 2024-002
Finding No. 2024-002 Late Refund Issuance Federal Program ALN 84.268 Federal Direct Student Loans Program Name of Federal Agency U.S. Department of Education Category Other matters – N. Special test Disbursements to or on behalf of students Significant deficiency of internal controls over compliance Criteria 34 CFR Section 668.22(a) states that: Whenever an institution disburses Title IV, HEA program funds by crediting a student's account and the total amount of all title IV, HEA program funds credited exceeds the amount of tuition and fees, room and board, and other authorized charges the institution assessed the student, the institution must pay the resulting credit balance directly to the student or parent as soon as possible but— (1) No later than 14 days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (2) No later than 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period Condition found During our evaluation of compliance with these requirements, we noted one (1) instance, or six percent (6%) of the sixty (60) samples selected, in which the University failed to return the corresponding refund within 14 days time frame from the date the University determined that the student had a Federal Student Aid (FSA) credit balance. Forty-one (41) days passed between the date the University identified an FSA credit balance for the student and the actual refund to the student. Finding Number Related Audit Compliance Requirement Student Identifier OPEID Pell Disbursed ($) Pell Underpayment ($) Pell Overpayment ($) Direct Loan Disbursed ($) Direct Loan Underpayment ($) Direct Loan Overpayment ($) 2024-002 Special Tests - Disbursements to students Student 1 1072401 $ - $ - $ - $ 1,793 $ - $ - Cause The Direct Loan posting was processed and posted on 8/15/2023. At the time, the student had an outstanding balance owed to the institution of $2,922. Given this balance, the University initially held the refund of $1,793 instead of applying it to the next term, SP23. Another posting for $2,722 was generated on 8/15/2023, the same day as the Direct Loan posting, which meant that the withheld refund no longer needed to be applied to the SP23 term, but due to it all happening on the same day, it was overlooked. Effect Failure to issue refunds within the required timeframe may cause financial hardship to students and expose the institution to non-compliance with Title IV regulations, potentially leading to penalties or corrective action from the Department of Education. Questioned cost None. The funds were returned. Context As part of our compliance tests with the disbursement requirements, we selected a sample from fifty-one (51) students out two thousand four hundred sixty-five (2,465) who received direct loans. Our test disclosed one (1) instance where the refund was not returned on a timely basis. Identification of a repeat finding This is not a repeat finding. Recommendation We recommend that the institution review its refund processing procedures to ensure timely issuance of credit balance refunds within the 14-day window. Implementing internal controls and automated alerts within the system can help flag accounts for timely refund processing to avoid future delays. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.
Finding 2024-003
Finding No. 2024-003 Timely Return on Title IV Funds Federal Program ALN 84.063 Federal Pell Grant Program Name of Federal Agency U.S. Department of Education Category Other matters – N. Special test Return of Title IV Funds Significant deficiency of internal controls over compliance Criteria Under 34 CFR § 668.22(j), An institution must return the amount of title IV funds for which it is responsible under paragraph (g) as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew. Condition found In testing compliance with the return of Title IV funds requirement, we noted three (3) cases, or eight percent (8%), of the sample selected which included students that received Pell and Direct loans, in which the University failed to return the total corresponding refund within 45 days from the date the University determined that the student withdrew, dropped-out, or failed to attend to the University, as follows: Finding Number Related Audit Compliance Requirement Student Identifier OPEID Pell Disbursed ($) Pell Underpayment ($) Pell Overpayment ($) Direct Loan Disbursed ($) Direct Loan Underpayment ($) Direct Loan Overpayment ($) 2024-003 Special Tests - Timely Return of Title IV Funds Student 1 1072401 $ 3,698 $ - $ - $ - $ - $ - 2024-003 Special Tests - Timely Return of Title IV Funds Student 2 1072401 $ 3,323 $ - $ - $ - $ - $ - 2024-003 Special Tests - Timely Return of Title IV Funds Student 3 1072401 $ 3,698 $ - $ - $ - $ - $ - Cause The return of tittle IV funds calculation process was conducted and completed on time in the Student Financial Assistance (SFA) office. However, updating the SFA module in Ellucian (school ISIS) was not flagged as valid. This omission meant that the University was unable to generate a cancelation payroll to close the transaction. Effect Failure to return unearned Title IV funds within the required 45-day timeframe can result in potential financial liabilities for the institution, non-compliance penalties, and a negative impact on the institution's participation in federal financial aid programs. Questioned cost None. The funds were returned. Context Three (3) of eleven (11) withdrawal forms from students who received Pell Grants from both campuses reviewed were not timely reimbursed to the Department of Education. The total amount of funds returned late was $5,688 out of a total of $10,512 for the campus of Miami. Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend that the institution implement enhanced monitoring controls within the financial aid system to ensure that all return of tittle IV funds calculations trigger the necessary flags to prompt timely returns of unearned Title IV funds. Additionally, staff should be trained in monitoring these processes to prevent further delays in compliance with federal regulations. The institution should address the deficiencies noted and review all return of tittle IV funds processes to avoid recurrence and to ensure compliance. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.
Finding 2024-004
Finding No. 2024-004 Delay in Direct Loan Adjustment After Enrollment Cancellation Federal Program ALN 84.268 Federal Direct Student Loans Program Name of Federal Agency U.S. Department of Education Category Other matters – N. Special test Return of Title IV Funds Significant deficiency of internal controls over compliance Criteria Per federal regulations (34 CFR § 685.303(b)), when a student’s enrollment status changes, such as through withdrawal or cancellation, any disbursed Title IV aid, including Pell Grants and Direct Loans, must be adjusted and returned to the Department of Education (DE) in a timely manner. Institutions are required to follow Return to Title IV (R2T4) procedures to ensure that funds are correctly adjusted based on the student's enrollment status. Condition found During our eligibility test, we identified a situation in which a student's enrollment was canceled after Pell and Direct Loan funds had already been credited to the student's account. Even though the Pell Grant adjustment and return to common origination disbursement (COD) were completed promptly, the adjustment for the Direct Loan was made after the audit tests disclosed that the loan had not been properly adjusted and returned to the Department of Education, as follows: Finding Number Related Audit Compliance Requirement Student Identifier OPEID Pell Disbursed ($) Pell Underpayment ($) Pell Overpayment ($) Direct Loan Disbursed ($) Direct Loan Underpayment ($) Direct Loan Overpayment ($) 2024-004 Eligibility Tests Student 1 1072400 $ - $ - $ - $ 5,010 $ - $ 5,010 Cause The Pell Grant program’s financial aid officer properly reported the adjustment to the fund on a timely basis. However, the SSFA officer responsible for the adjustment did not execute the corresponding Direct Loan adjustment. Effect The failure to promptly adjust and return Direct Loan funds may result in non-compliance with Title IV regulations. This could lead to potential penalties, the loss of institutional eligibility to participate in Title IV programs, and incorrect reporting to the Department of Education. Questioned cost None. The funds were returned. Context One (1) out of the sixty (60) student ledgers reviewed in the eligibility test indicated that the Direct Loan enrollment cancellation adjustment was not performed in a timely manner. Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend that the institution strengthen its internal controls and communication between departments responsible for managing Title IV funds to ensure timely adjustment and return of all federal funds upon changes in student enrollment status. Implementing a formal review process and automating alerts within the financial aid system can help prevent delays in future adjustments and ensure compliance with federal regulations. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 60-63.