Audit 396714

Criteria or specific requirement: The Department of Education requires the University to return unclaimed credit balance funds to the U.S. Department of Education no later than 240 days after the date the original credit balance check was issued (34 CFR 668.164(l)). If a check sent to a student or parent is not returned to the University but is not cashed, the University must return the funds to the Secretary no later than 240 days after the date it issued the check. The Department of Education also requires the University to pay Title IV credit balances directly to the student or parent as soon as possible, but no later than fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period (34 CFR 668.164 (h)). Condition: During our audit of the Student Financial Assistance Cluster, we identified instances in which the University did not return uncleared Title IV credit balance checks to the U.S. Department of Education within the required 240-day period from the date the original check was issued. Specifically, for a sample of 40 student refund payments issued during the fiscal year, 2 checks in the amounts of $578 and $1,967 remained outstanding beyond 240 days and were not remitted to The Department of Education within the allowable timeframe. In addition, the check written in the amount of $578 was not paid within the required14 day period. Questioned costs: None Cause: The noncompliance was caused by inadequate monitoring controls over outstanding Title IV refund checks and credit balances. Specifically, the University did not maintain a systematic process to track the aging of uncleared checks against the 240-day regulatory deadline, and responsibilities for review and timely remittance were not clearly defined. Effect: Title IV funds were held by the University beyond the allowable federal timeframe and credit balances were not paid in accordance with federal requirements, resulting in noncompliance with special tests and provisions requirements of the Student Financial Assistance Cluster. Repeat Finding: No. Recommendation: We recommend the University evaluate its monitoring controls over outstanding Title IV refund checks and credit balances to ensure that funds are returned to the Secretary no later than 240 days after the date the University issued the payment and credit balance payments are made within the 14-day requirement. Views of responsible officials: There is no disagreement with the audit finding.