Audit 394393

FEDERAL AWARD FINDING: 2025-101 The District did not timely return Title IV funds to the U.S. Department of Education, increasing the risk of reduced or terminated future awards Cluster name: Student Financial Assistance Cluster Assistance Listings number(s) and name(s): 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.038 Federal Perkins Loan Program—Federal Capital Contributions 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award number(s) and year(s): P063P241066 July 1, 2024 to June 30, 2025 P007A240115 July 1, 2024 to June 30, 2025 P033A240115 July 1, 2024 to June 30, 2025 P268K241066 July 1, 2024 to June 30, 2025 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions - return of Title IV funds Questioned costs: None Condition Contrary to federal regulation and the District’s policies and procedures, the District’s Student Financial Services Office (SF Office) did not initiate a return of Title IV funds to the U.S. Department of Education (ED) within the required 45 days of becoming aware that a student withdrew from the District. Specifically, for 3 of 25 students tested, the District did not initiate returns until between 71 and 83 days after becoming aware the students withdrew. Effect The District’s failure to timely return Title IV funding and the lack of monitoring over the SF Office’s compliance with federal regulation and District policies and procedures increases the risk that additional Title IV funds could be returned past the 45-day requirement and increases the risk that ED could reduce or terminate future awards of Title IV funds for noncompliance. Cause The District did not monitor its SF Office’s adherence to District-wide policies and procedures to ensure compliance with Title IV program requirements. Specifically, although the District had communicated District-wide policies to the SF Office that is responsible for administering the federal programs, adhering to federal regulations, and following District-wide policies and procedures, the District did not have procedures in place to monitor and address employee turnover of personnel responsible for adherence to District-wide policies regarding timely return of Title IV funds. Criteria Federal regulation and District policies and procedures require the return of Title IV funds when a recipient of Title IV grant or loan assistance withdraws from the District during a payment period or period of enrollment in which the recipient began attendance. Specifically, the District must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistances earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs no later than 45 days after the date of the District’s determination that the student withdrew (34 Code of Federal Regulations [CFR] §668.22[a –j]). Further, federal guidelines require establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the District 1. Monitor its SF Office to ensure its compliance with District policies and procedures for the return of Title IV funds. 2. Design and document control procedures to monitor and address employee turnover of personnel responsible for performing procedures related to the return of Title IV funds. 3. Initiate returns of Title IV funds to ED no later than 45 days after the date of the District’s determination that the student withdrew. Views of responsible officials District management concurs with this finding. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.