Marshall B. Ketchum University
Corrective Action Plan
For the Fiscal Year Ended June 30, 2024
U.S. Department of Education – Student Financial Assistance Cluster
Federal Awards Finding Item 2024-001 – Special Tests and Provisions – Return of Title IV Funds – Significant Deficiency In Internal Contr...
Marshall B. Ketchum University
Corrective Action Plan
For the Fiscal Year Ended June 30, 2024
U.S. Department of Education – Student Financial Assistance Cluster
Federal Awards Finding Item 2024-001 – Special Tests and Provisions – Return of Title IV Funds – Significant Deficiency In Internal Controls Over Compliance
Conditions – A sample of seven students out of a population of 21 were identified by the University as having received some federal assistance and withdrew from the University during the year under audit. The auditors found two calculations of the return of Title IV funds contained errors related to the total number of days in the term because consideration for the exclusion of certain days from the winter scheduled break were not properly implemented. This calculation error caused two of the seven samples to have the wrong total of aid earned because those two students had withdrawn before the 60% completion threshold. In this same sample universe, two students had incorrect calculations of values to be returned because the institutional charges were not included in the R2T4 calculation. In both cases, the students began a term while the school evaluated their academic performance form the previous term. The students were dismissed from their respective programs based on academic performance, but the school refunded full tuition and fees as the students were not given adequate opportunity to attend the terms for which they withdrew. As such, the school had considered the full tuition refund as a $0 institutional charge on the R2T4 calculation which caused calculation errors for what was earned in the term. These two errors caused an understatement of $24,127 unsubsidized loan that would be required to be returned by the school.
Corrective Action Plan:
In response to the findings regarding Return of Title IV funds Marshall B. Ketchum University is taking the following corrective actions.
The Financial Aid Office has revised the Return of Title IV Aid policy to now include the following statement:
When calculating the amount the school must return, the tuition and fee charges that were applicable at the time of withdrawal are used for purposes of calculation the Return of Title IV funds. Any subsequent tuition and fee refunds credited back to the students account after the withdrawal date will not be taken into consideration for purposes of calculating the Return of Title IV funds.
The revised R2T4 policy above will be updated in the university catalog as well.
When Financial Aid is processing the configuration and system setup for the upcoming academic year, we will take into account any additional days in which there are no scheduled classes that are not included in the university defined scheduled breaks.
For example, if the scheduled Winter Recess break as defined by the University Registrar for the 2024-2025 academic year is 12/23/24-1/5/25, we will also include 12/21/24 & 12/22/24 as part of the scheduled break for Return of Title IV purposes, as there will be no scheduled classes on those days. This will increase the scheduled break for R2T4 purposes from 14 to 16 days and will be excluded from the R2T4 calculation.
The scheduled R2T4 breaks for the 2024-2025 academic year have already been reviewed and confirmed for compliance purposes per FSA R2T4 regulations.
The Director of Financial Aid has reviewed the Title IV federal regulations on Return of Title IV funding and acknowledges the issues and is prepared to be compliant going forward. In addition, Financial Aid Staff will be properly trained and will continue to be trained as needed.
Sincerely,
Kyle Pryor, Director of Financial Aid, (714) 449-7448
Projected Completion Date: October 15, 2024