Finding Text
Finding number: 2023-003
Federal agency: U.S. Department of Education
Programs: Student Financial Assistance Cluster
Assistance Listing #: 84.063, 84.268
Award year: 2023
Criteria
According to 34 CFR 668.22(e):
(1) General. The amount of title IV grant or loan assistance that is earned by the student is calculated by—
(i) Determining the percentage of title IV grant or loan assistance that has been earned by the student, as described in paragraph (e)(2) of this section; and
(ii) Applying this percentage to the total amount of title IV grant or loan assistance that was disbursed
(and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student, or on the student's behalf, for the payment period or period of enrollment as of the student's withdrawal date.
(4) Total amount of unearned title IV assistance to be returned. The unearned amount of title IV assistance
to be returned is calculated by subtracting the amount of title IV assistance earned by the student as calculated under paragraph (e)(1) of this section from the amount of title IV aid that was disbursed to the student as of the date of the institution's determination that the student withdrew.
Condition
The Financial Aid Department is responsible for completing the Return of Title IV calculation to determine how much Title IV funds the student earned and how much must be returned to the Department of Education. Once the Return of Title IV calculation is completed, Franklin Cummings Tech is responsible for adjusting the student’s billing statement and returning unearned Title IV funds through the U.S. Department of Education’s Grant Management
System (“G5”). During our testing, we noted 2 students, out of a sample of 9, where a return of unearned Title IV funds was not calculated even though the students withdrew and 1 out of 9 students received additional Title IV funds after a return of Title IV funds was processed.
Cause
Franklin Cummings Tech did not consistently follow the procedures in place to monitor student withdrawals related to Title IV funds that must be calculated and to return unearned portions to the Department of Education.
Effect
Franklin Cummings Tech did not return unearned Title IV funds.
Questioned Costs
$9,939
Perspective
Our sample was not, and was not intended to be, statistically valid. Of the 9 students selected for testing, 3 students, or 33.3% of our sample, were not calculated and processed correctly for return of unearned Title IV funds.
Identification as a Repeat Finding, if applicable
Not applicable
Recommendation
Franklin Cummings Tech should strengthen its controls surrounding the process of Return of Title IV calculations for all students who withdraw to ensure that funds earned are calculated correctly and unearned portions are returned to the Department of Education properly.
View of Responsible Officials
Franklin Cummings Tech agrees with the finding.