Audit 348350

Finding 2024-001 Untimely Return of Title IV Funds/Federal Department:US Department of Education/CFDA Numbers: 84.268/Cluster Name: Student Financial Assistance Cluster/Programs:Federal Direct Student Loans/Awards Numbers:P268K231372, P268K241372/Questioned Cost: None/Program Expenditures: $17,886,002 Olivet Nazarene University (University) did not return Title IV funds to the Department of Education (Department) within 45 days after the date of the University’s determination that a student withdrew. During our testing of 25 students who withdrew from the University during the year, it was noted that two students’ (8%) Direct Unsubsidized loan funds were not timely returned to the Department. The University’s dates of determination the students withdrew were November 7, 2023 and November 13, 2023; however, the University did not return the students’ unearned Direct Unsubsidized loan funds to the Department until January 18, 2024 (21 and 27 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 668.22(j)(1)) states an institution must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that unearned Title IV funds are returned to the Department in a timely manner. University officials stated both untimely return of Title IV funds (R2T4’s) were due to conflicts, including the Christmas/New Year’s two week break. The committee meets every other Wednesday. Both R2T4’s were done on-time, but the review was delayed due to travel of two of the members. When the committee met, an error was found in the denominator, and were sent back for revision, and completed the next meeting. Because that occurred in January, the process was late. The University believes this was an isolated incident based on the timing of the campus shut-down. Failure to timely return unearned Title IV funds to the Department may jeopardize future Federal funding. (Finding Code No. 2024-001, 2023-002) RECOMMENDATION We recommend the University timely return to the Department the amount of title IV funds for which it is responsible after the University has determined a student has withdrawn. UNIVERSITY RESPONSE The University agrees with the finding and will implement a new process to review all R2T4’s weekly, instead of the current bi-weekly process. In addition, if any committee members are absent, the remaining members will review the R2T4’s on the scheduled dates.

Finding 2024-001 Untimely Return of Title IV Funds/Federal Department:US Department of Education/CFDA Numbers: 84.268/Cluster Name: Student Financial Assistance Cluster/Programs:Federal Direct Student Loans/Awards Numbers:P268K231372, P268K241372/Questioned Cost: None/Program Expenditures: $17,886,002 Olivet Nazarene University (University) did not return Title IV funds to the Department of Education (Department) within 45 days after the date of the University’s determination that a student withdrew. During our testing of 25 students who withdrew from the University during the year, it was noted that two students’ (8%) Direct Unsubsidized loan funds were not timely returned to the Department. The University’s dates of determination the students withdrew were November 7, 2023 and November 13, 2023; however, the University did not return the students’ unearned Direct Unsubsidized loan funds to the Department until January 18, 2024 (21 and 27 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 668.22(j)(1)) states an institution must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that unearned Title IV funds are returned to the Department in a timely manner. University officials stated both untimely return of Title IV funds (R2T4’s) were due to conflicts, including the Christmas/New Year’s two week break. The committee meets every other Wednesday. Both R2T4’s were done on-time, but the review was delayed due to travel of two of the members. When the committee met, an error was found in the denominator, and were sent back for revision, and completed the next meeting. Because that occurred in January, the process was late. The University believes this was an isolated incident based on the timing of the campus shut-down. Failure to timely return unearned Title IV funds to the Department may jeopardize future Federal funding. (Finding Code No. 2024-001, 2023-002) RECOMMENDATION We recommend the University timely return to the Department the amount of title IV funds for which it is responsible after the University has determined a student has withdrawn. UNIVERSITY RESPONSE The University agrees with the finding and will implement a new process to review all R2T4’s weekly, instead of the current bi-weekly process. In addition, if any committee members are absent, the remaining members will review the R2T4’s on the scheduled dates.