Audit 383445

FINDING 2025-001 – SIGNIFICANT DEFIENCY – FEDERAL COMPLIANCE – STUDENT FINANCIAL ASSISTANCE CLUSTER Federal Department: Department of Education AL Number(s): 84.007, 84.033, 84.063, 84.268, 93.364 Program Name(s): Student Financial Assistance Cluster Questioned Costs: Not determined. Criteria: In accordance with 34 CFR § 668.22, an institution must calculate and return Title IV funds when a student withdraws from a Title IV eligible program prior to completing more than 60% of the payment period or period of enrollment. Once a student has completed more than 60% of the payment period, the student is considered to have earned their entire Title IV award, and no Return of Title IV (R2T4) calculation is required. Institutions are required to establish and maintain effective internal controls to ensure R2T4 calculations are performed accurately and only when required. Condition: For two of the forty students selected for testing, the District performed an R2T4 calculation even though the students had completed more than 60% of the payment period and had earned their full Title IV awards. Cause: The District’s internal controls over the identification and review of withdrawal dates and completion percentages were not properly designed, resulting in R2T4 calculations being performed when they were not required. Effect: The District performed R2T4 calculations for two students who had completed more than 60% of the payment period and had earned 100% of their Title IV funds. As a result, Title IV funds were inappropriately returned to the Department of Education for these students, resulting in the unnecessary return of federal student financial aid and noncompliance with R2T4 requirements. Fiscal Impact: Audit testing identified an over return of approximately $674 in Title IV funds related to the two students with deviations noted in the sample. The total fiscal impact could not be determined. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the District strengthen internal controls over the R2T4 process to ensure calculations are performed only for students who withdraw prior to completing 60% of the payment period. This includes implementing procedures to verify completion percentages prior to initiating an R2T4 calculation and performing supervisory reviews to ensure compliance with federal requirements. Views of Responsible Officials and Planned Corrective Action: See corrective action plan.