Finding 2025-003: Student Financial Aid – Excess Cash Finding: Lake Forest College had excess cash for the FDL program ranging from $24,903 to $3,683,698 during the period of January 30, 2025 through February 7, 2025. In this situation, the excess cash exceeded one percent of total prior year drawdo...
Finding 2025-003: Student Financial Aid – Excess Cash Finding: Lake Forest College had excess cash for the FDL program ranging from $24,903 to $3,683,698 during the period of January 30, 2025 through February 7, 2025. In this situation, the excess cash exceeded one percent of total prior year drawdowns, and the amount was not returned within a seven-day period. Cause: The College drew down funds in advance of the Spring semester which is allowed based on the College’s cash management method. However, due to timing differences, the funds were not ultimately disbursed to students until 8 days after the drawdown was made. Corrective Actions Taken or Planned: On January 27, 2025, the Office of Management and Budget issued a directive pausing the disbursement of federal grants and loans, effective the following day. With uncertainty surrounding whether this pause applied to the FDL program, its duration, and the potential impact on the College’s cash flow, the Business Office made a one-time exception to its longstanding best-practice process. Instead of using finalized disbursement data, the College opted to draw funds based on preliminary disbursement information to mitigate potential financial disruption. To prevent recurrence and ensure compliance with federal cash management regulations, the College has implemented the following corrective measures: 1. Return to Standard Practice: The Business Office has resumed its standard drawdown procedure, which utilizes finalized disbursement data after the College’s add/drop date to ensure alignment with actual student disbursements. 2. Contingency Protocol for Exceptional Circumstances: In the event of future extraordinary circumstances, the Business Office will implement a conservative drawdown buffer, limiting initial draws to no more than 66% of preliminary disbursement estimates. This approach will reduce the risk of excess cash while maintaining operational flexibility. 3. Enhanced Coordination and Communication: The Business Office will maintain close coordination with the Office of Financial Aid, along with federal agencies and monitor guidance during periods of uncertainty to ensure timely and compliant decision-making. Contact Person Responsible: AJ Rodino, AVP for Business Lake Forest College Completion Date: 11/1/2025