Finding 2024-002: Student Financial Assistance Cluster - Refunds of Title IV Funds - Special Tests & Provisions
Criteria: In accordance with 34 CFR 668.221, when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which th...
Finding 2024-002: Student Financial Assistance Cluster - Refunds of Title IV Funds - Special Tests & Provisions
Criteria: In accordance with 34 CFR 668.221, when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution 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 assistance 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 program within 45 days of the date of withdrawal.
Condition: We examined 12 students who had withdrawn from the institution during a payment period or period of enrollment in which the recipient began attendance to ensure that the calculation and return of Title IV funds was done in accordance with 34 CFR 668.221. We noted that for one student who officially withdrew as of July 1, 2024, the calculation related to the return of Title IV funds was not done until October 7, 2024 and the return of funds did not occur until October 16, 2024. Controls in place were not operating effectively to ensure calculations and return of Title IV funds were done in the required time frame as outlined in 34 CFR 668.221.
Cause: The College's process to identify students whose withdrawal requires a calculation of the return of Title IV funds is a manual process. The College does not have a process in place to verify that all students are identified and that all calculations and return of funds were done timely.
Effect: The College had 1 student whose calculation and return of Title IV funds was not completed within the required timeframe and potentially could have additional students whose calculation and return of Title IV funds was also not completed in a timely manner.
Repeat Finding: This is not a repeat finding.
Questioned costs: Unknown
Recommendation: We recommend that the College follow procedures in place to ensure all students who have withdrawn and require a calculation and potential return of Title IV funds are identified timely so that return of Title IV funds may be completed as required.
View of Responsible Officials and Planned Corrective Action: Management agrees, see separate Corrective Action Plan
Responsible Official: Executive Director of Finance and Financial Aid
Corrective Action Plan: To ensure compliance with federal regulations regarding the Return to Title IV (R2T4) process, the College will implement the following steps to review students who begin attendance during a payment period or enrollment period, withdraw from the institution, and determine if the amount of Title IV aid earned by the student is less than the amount disbursed to the student or on their behalf as of the withdrawal date. Any excess Title IV aid will be returned to the appropriate program within 45 days of the withdrawal. The following procedures will be enacted:
1. Review of Withdrawal Reports:
The Assistant Director of Financial Aid will regularly review the daily registration changes report to identify students who have withdrawn from the term.
2. Assessment of Title IV Aid:
For each student identified as withdrawn, the Assistant Director of Financial Aid will verify whether Title IV aid was disbursed. If Title IV aid was received, the R2T4 calculation will be completed to determine the amount of aid earned.
3. Return of Unearned Title IV Funds:
If the calculation indicates that the amount of Title IV aid disbursed exceeds the amount earned, the Assistant Director of Financial Aid will ensure that the appropriate funds are returned to the Title IV program through the Common Origination and Disbursement (COD) system, PowerFAIDS, and Jenzabar within 30 days of the student's withdrawal.
4. Notification and Coordination of Fund Return:
If the College is required to return Title IV funds, the Assistant Director of Financial Aid will notify the Executive Director of Finance and Financial Aid, as well as the Chief Financial Officer, to ensure that funds are returned to the G5 system in a timely manner.
5. Daily Report Verification:
The Assistant Director of Financial Aid will sign and date the daily registration changes report to confirm that it has been reviewed, the appropriate R2T4 calculation has been completed, and any necessary funds have been returned to the Title IV program.
By implementing these steps, the College will ensure that it remains in full compliance with Title IV regulations, effectively manages financial aid disbursements, and returns unearned funds in a timely manner.