Audit 394233

Finding 2025-002; Student Financial Assistance Cluster – Special Tests and Provisions – Disbursements to and on Behalf of Students – Compliance and Internal Control (Significant Deficiency) Criteria: Federal regulations under 34 CFR 668.164(h)(2) require institutions participating in Title IV programs to disburse a student’s credit balance no later than 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. Condition: The University did not consistently disburse student credit balances within the required 14 day timeframe. Cause: Due to manual nature of the credit reimbursement process, and short-staffing within the department, there were insufficient monitoring controls in place to identify and resolve credit balances approaching the 14 day deadline. Effect: From a non-statistical sample of 22 credit balances, we identified two credit balances of $1,197 that were disbursed beyond the 14 day requirement, resulting in non-compliance with federal regulations. Questioned Costs: None. Repeat Finding: No. Recommendation: We recommend that management implement procedures to monitor timing of non-workdays, staff absences and scheduled time off that could effect student credit disbursement timing. Management should establish coverage protocols to ensure that the University disburses student credit balances consistently and in a timely manner. Management should designate trained backup personnel and document responsibility for control performance during periods of employee absence. Management should periodically review adherence to these procedures to confirm that credit balance disbursements are performed timely and as designed, regardless of staffing availability. Alternatively, management should consider automating the student credit balance disbursements to reduce reliance on manual processes and/or individual personnel. Views of Responsible Officials: Management acknowledges the errors identified and has taken action to strengthen controls surrounding these processes.