Finding 2025-001 Federal Agency: U.S. Department of Education Program: Student Financial Assistance Cluster (84.268 Direct Loans, 84.063 Federal Pell Grant Program) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance and Material Noncompliance Criteria: In accordance with 34 CFR § 668.164(a)(1), except for certain specified circumstances, a disbursement of Title IV, HEA program funds occurs on the date the institution credits the student’s ledger account or pays the student or parent directly. This includes institutional funds used in advance of receiving Title IV, HEA program funds. The 2025 Compliance Supplement for the Student Financial Assistance Cluster provides that institutions submit disbursement records to the Common Origination and Disbursement (COD) System and that the disbursement record reports the actual disbursement date and amount of the disbursement. The Compliance Supplement identifies the disbursement date and amount as key items to be tested for COD reporting. Accordingly, when an institution credits Title IV aid to a student’s ledger using institutional funds, the date the student’s account is credited generally represents the actual disbursement date that should be reported to COD. The subsequent date on which COD processes the transaction or the institution receives reimbursement from the Department of Education does not change the date on which the Title IV funds were disbursed to the student. Condition: We selected 25 students for testing of Title IV disbursement reporting and compared the COD Date Disbursed to the corresponding date the Title IV funds were credited to each student’s ledger account. Of the 25 students tested, 16 students, or 64.0%, had one or more instances in which the COD Date Disbursed did not agree with the corresponding disbursement date reflected on the student ledger. The 25 students represented 77 individual disbursements tested, of which 42 disbursements, or 54.5%, had COD Date Disbursed dates that did not agree with the corresponding student ledger dates. In the exceptions noted, the COD Date Disbursed was later than the date the Title IV funds were credited to the student’s ledger account. Cause: The condition resulted from the institution’s interpretation of the HCM1 funding process. Management believed that, because the institution is required to use institutional funds to credit the student’s account before receiving reimbursement from the Department of Education, the COD Date Disbursed should reflect a later date associated with the COD reporting or federal reimbursement process rather than the date the Title IV funds were credited to the student’s ledger account. In addition, the institution’s procedures did not include an effective reconciliation or review control to ensure that the Date Disbursed reported to COD agreed with the date the Title IV funds were credited to the student’s account. Effect: Because the condition was identified for 16 of the 25 students tested, representing 42 of 77 individual disbursements tested, the errors do not appear to represent isolated instances and increase the risk that inaccurate disbursement dates may be reported to COD without timely detection or correction. Questioned Costs: None Repeat Finding: No. This finding is not a repeat of a finding reported in the immediately prior audit. Recommendation: We recommend that the institution perform a review of all Title IV disbursements made during the year and compare the COD Date Disbursed to the corresponding date the Title IV funds were credited to the student’s ledger account. Any discrepancies identified should be investigated and, where appropriate, corrected in COD in accordance with Department of Education requirements. We further recommend that the institution implement a reconciliation or review control to ensure that, on an ongoing basis, the Date Disbursed reported to COD agrees with the actual date the Title IV funds were credited to the student’s account and that any discrepancies are identified and corrected timely. Views of Responsible Officials and Planned Corrective Action: The institution agrees with the finding. A corrective action plan addressing Finding 2025-001 has been prepared and is submitted separately as part of the reporting package.