Audit 386042

Finding 2025-001: Return of Title IV Funds Federal Program: Student Financial Assistance Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: Not applicable ALN Number: 84.063, 84.268 Federal Award Number: P063P242121, PK268K252121 Federal Award Year: June 30, 2025 Criteria: 34 CFR 668.22 requires that when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with Federal regulations and return the unearned portion of the grant or loan funds to the Title IV programs as soon as possible but no later than 45 days after the withdrawal date. Condition/Context: The federal aid refunds for seven of eleven students tested as part of our sample for Return of Title IV (R2T4) testing were not calculated correctly and resulted in the College refunding incorrect amounts to the Title IV Program. The sample was not a statistically valid sample. Questioned Costs: For federal award P268K252121, Federal Direct Student Loans, the College returned $455 more than required for two students tested. For federal award P063P242121, Federal Pell Grant Program, the College returned $338 more than required for five students. Cause: The College did not properly calculate the number of days in a term (excluding breaks of five days or more) which resulted in the incorrect unearned aid percentage to be used in the refund calculation. Effect: The amounts refunded to the U.S. Department of Education were incorrect. The amount returned was more than what should have been returned. Recommendation: The College should reevaluate the process around completing R2T4 calculations. Also, a more rigorous review process should be implemented over refund calculations to ensure the proper calculations of the R2T4 worksheet. Views of Responsible Officials and Planned Corrective Actions: Management recognizes that staff had incorrectly interpreted the length of break that would necessitate a change in the refund calculation. Staff are now aware of the correct interpretation of the rule and will use it for all future calculations. Management will also identify a consultant to work with the College's Director of Financial Aid, Controller and Registrar to review all rules regarding return to title IV calculations so a guide can be created to lessen the chance of incorrect calculations going forward.